The Fear Factor

Re; "Thus did the welfare state anchor its rationale in the solid rock of fear."

Like all religions...

God wasn't working, so we made a new god out of government.

Whatever you think of Michael Moore's honesty as a film-maker, his critique of the war in Iraq or of recent military recruiting techniques.... you should see his film Fahrenheit 911 for the second half of the film which is an extended essay on how government uses fear to manipulate us.

But even as you pointed out the other day the American capitalist system has worked better since the creation of the post WW II mixed economy then it did in the earlier era.

So what is so wrong with the people deciding that it wants to use the nonmarket forces to deal with some of these things like destitution, hunger, disabiltiy, unemployment, etc., if it produces superior results. The American capitalist system had left large blocs of the population suffering from these in the earlier era. And that was in an era when there was unlimited free land available for the taking.

The theory you are advancing is not some theorical construction that has never existed. Rather, it was essentially the US economy as it had existed before WW II.

Yes, government is not perfect. But neither is the free market economy and it often generates costs that we as a humane society do not have to accept. And you have failed to demonstrate that we are worse off because of these interferences.

So what is so wrong with the people deciding that it wants to use the nonmarket forces to deal with some of these things like destitution, hunger, disabiltiy, unemployment, etc., if it produces superior results. The American capitalist system had left large blocs of the population suffering from these in the earlier era. And that was in an era when there was unlimited free land available for the taking.

Who knows what course of action the American economy would've taken if things were left to its own mechanisms. Surely a socialist structure might've arisen, but would the system be as large as it is if we would recognize that the government can't do everything? Why must it be government to provide us with health insurance, disability insurance, old age insurance and destitution insurance? As the capital markets became more advanced, several of these insurances have become affordable and flexible for everyday citizens, rich and poor alike. I will be the first to argue that some things need to be provided by the government, such as national security, but there needs to be a limit as to how much liberty we need to trade for a small tidbit of "security" from the government.

God helps those who help themselves, through government as well as individually.

Spencer,

Do you really believe that the US economy before WWII was an example of unfettered capitalism without nonmarket interference?

By the way, why the burden shift with "Yes, government is not perfect. But neither is the free market economy and it often generates costs that we as a humane society do not have to accept. And you have failed to demonstrate that we are worse off because of these interferences."?

I'm surprised if you've never heard any of the arguments for free markets, but here's one: Wealth exists because people produce it. People produce wealth because they have an incentive to do so. When people's wealth can be forcibly taken from them, this incentive is diminished. Consequently, less total wealth is produced than otherwise would be.

See also M. Friedman's argument about the four ways of spending money, the public choice arguments about the disconnect between who gets the benefits and who pays the costs of government provision of goods, etc. Not to mention the application of supply and demand analysis to most interventionism. (Call me a mossback but I still believe in supply and demand.) Imagine that you are a producer of some good that congress has decided is a need or a right that will be subsidized so that people can consume it at less personal cost. How would you react in terms of your price and output? What if you were a potential consumer? If I recall my principles class, the sellers price and quantity go up, the consumption cost falls, government spending on the subsidy rises and so the government relies on some combination of taxes, deficits and inflation to deal with these higher costs. Seriously, free marketers may be fairly accused of many things, but failing to make arguments for markets and against interventionism is not one of them.

Is there any argument that things are better now because of, rather than in spite of, the last century's increasing violent intervention in the marketplace?

Nowhere in the article did I find mention of any suggestion that a given fear might be justified. Neither WWII nor the Cold War were mere figments of government imagination, and presently there are a great many men in the world who fervently desire to kill American citizens even at the cost of their lives. These are not bugaboos- these are facts admitted cheerfully by America's enemies.

The article was very lucid in relating how governments might use these dangers to expand their own power, but I find it disturbing how the author explicitly terms these threats "phony"- as if they would simply melt into air if only we did not believe in them. To say that government serves our safety badly is one thing. To say that we are already safe is another thing entirely.