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Saturday, November 15, 2008

The Myth of Good Government

I above all else want a good government, but it probably takes a number of things. It's probably a concept that isn't easily quantifiable. I have never really thought about what that means.

However, I have heard about what others think is good government. Perhaps good government involved adhering to the letter and spirit of a constitution. Perhaps good government is providing services in the best manner possible. Perhaps still good government involves little or no corruption amongst government officials.

The first paragraph in this column by Lew Rockwell certainly hurts because I consider myself a "classical liberal" but there are some good points to be made here. Here's one:
Sometimes the point is easier to see when looking at foreign governments, such as the tragic case of China. The government is embarking on an explosive venture to dump $586 billion into "infrastructure" over two years. The reason is the classic Keynesian excuse: the spending is needed to stimulate investment. Never mind that this trick has never worked in all of human history. This is instead a grand plan to loot the private sector on behalf of the Communist Party, which will then spend the money bolstering its power. 

No country knows more about the failures of this type of central planning than China. Every form of collectivism has been tried out on these poor souls, and tens of millions lost their lives in the course of Mao's insane collectivist experiments. That this new plan is being enacted in the name of Lord Keynes rather than Karl Marx is irrelevant. The effects are the same: expand power and reduce liberty.

China's recovery from communism is one of the most inspiring stories in the history of economic development. The country went from being a suffering and impoverished land of catastrophe to being modernized in just 15 years. The state shrunk in scope nearly by default as the private sector grew and grew. This wasn't the plan. It was the de facto result of the new tolerance of free economic activity. The state went into protective mode to keep its power, and did nothing to stop the swell of private enterprise. The result was glorious.

Keep in mind this critical point. China's restoration as a civilized society came about not due to some central plan, but by its absence. The fact that the state did not intervene led to prosperity. Again, it wasn't a policy or a constitution or a law that made the difference. There was no switch from a communist-style government to a night-watchman state. Because the state abandoned its posts under public opposition and contempt, society could flourish.

But the state never went away. It's just that its depredations have been spotty and unpredictable. Had history taken a better course, the central state would have melted away completely, and law would have devolved to the most local levels. Sadly for the Chinese, the state persisted in its old structure, even as the private sector grew and grew. The state still had its hand in the large industries such as steel and energy, and, of course, it controlled the banking sector. 

For some of you, the thought is scary, but I wonder if Lew is advocating some form of anarchy. I don't like anarchy to be honest, but he may have a point when he says that government can only grow in scope. I won't advocate anarchy but I can certainly advocate ways where the people can keep the state in check.

Of course these days it probably would be hard, because the American citizen expects so much from their government although these days, I'm not so sure government can provide Especially if 41 state and city budgets are falling fast. Even government can't use their resources efficiently to satisfy the wants of a populace.

One reason that the Illinois Constitutional Convention referendum failed last week was because so many state workers retired or otherwise were concerned about their pensions. And never mind that they still want theirs because it's said to be often underfunded. It's safe to say it might be time to re-evaluate what the government can or can't provide for anymore.

I just have to add that this financial crisis from my basic understanding of it starting with the sub-prime loans and then the collapse of investment banks because of these sub-prime loans. It's just a huge mess! Because of this I pay attention to any economic news I can.

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