Arnold Kling  

Incumbents and Government

Barbell Labor Market?... Home Building Trends...

What does government do? Austrian economists fear that government simply serves to protect incumbents. In a long, informative review of a book by Hans Herman-Hoppe, Andy Duncan writes,

ask yourself if there are many large corporations in the US or large farming concerns, which would still be in business if not supported through subsidy, taxation, and regulation, by your various levels of government? Or if you may be developing families of elites who hand garnered privileges on from one generation to the next? Give it a couple of hundred more years and I think the European feudalism you escaped from may finally catch up with you

For Discussion. Can the United States maintain a balance between paternalism and capitalism, or is only one extreme or the other a stable equilibrium?

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COMMENTS (2 to date)
Tom Grey writes:

I believe that computers, and eGov't, have the potential to significantly reduce the feudalism/ paternalism. Through CRM - customer relationship management, er, TRM, taxpayer rel. mgmt.

It will be possible, and then manditory, for all persons to keep track of the gov't taxes they pay, and the direct gov't benefits they receive. And, while all will continue to want to receive Other People's Money, they will find they are paying more than they get.

And the way the gov't should fund direct payments is through loans. (See my Tax Loans for one idea.) Thus, those who get benefits will pay more back to the gov't, whether as taxes or loan repayments.

Benefit demand management is the needed idea.

Patri Friedman writes:

In between seems a much more likely equilibrium than either extreme. Extreme paternalism is a parasite sucking on a dry host, it will tend to allow some capitalism to fatten up its victim. Extreme capitalism has an empty parasite niche, and the huge gains from successfully occupying it will draw them in hordes.

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