Russ Roberts interviews David Brady over on Econ Talk on health care
Brady argues: "It is likely the average person is a Keynesian"
To the extent that Brady is correct, this has dire implications for liberty. The question is, if this assertion is true, how did this happen?
Brady does on:
"Political dynamic is to always expand it. Reality: due to tax changes over last 25-30 years, we have removed more and more families from the income tax. Political economy of that is unhealthy; any expansion to government starts off with 40% support because it doesn't cost anything out of pocket to those off the taxes, unless they worry about the dynamics of higher tax rates."
This is key, Brady looks at the dynamic of change and the underlying trend in the US seems to be a willingness to trade liberty for security. The result of that is a decision to accept less future freedom and growth for current security.
Why is this? I am thinking about the distinction in classical philosophy between the wise and the many. If the many can be represented by the character of George Castanza from the old Seinfeld TV program and the wise (in the Aristotlean sense) might be represented by figures such as Robert Higgs or Milton Freedom, I wonder what are the realistic actions that are open to those who aspire to move from the many to the wise?
Direct link to interview - http://files.libertyfund.org/econtalk/y2009/Bradyhealth.mp3
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Boyes uses a recent Paul Krugman op ed to take a look at the current discourse about the proper role of the government. This
ReplyDeleteilluminates the basic tradeoff between liberty and security.
That said, the issue of the role of government is at the heart of a free society - liberty carries with it responsibility and institutions both formal and informal are very important to facilitating exchange, these rules of the road reduce transactions costs and potential violence.
What does this all mean today? I have a sense that the "many" in our society today have made a trade off for security at the expense of liberty. That is, in return for government support, many individual decision makers are willing to accept lower future growth and greater future obligation.
I am reminded of the following:
Larry Reed at the FEE asserts:
1. Government can provide you with absolutely nothing except that which it has first taken from somebody else.
2. A government big enough to give you want you want, is big enough to take everything you have.
3. A free people are not economically equal, and an economically equal people are not free.
Government spending is the opposite of voluntary exchange. Exchange that is mutually voluntary is a positive sum process leading to wealth creation - the government mandated exchange we see in deficit spending, deficit financing and monetary actions to further debase the currency are negative sum.
But the impact extends far beyond the arena of current and future standard of living - what is happening is a conscious trade off to engage in negative sum arrangements in order to achieve a sense of security - which is ultimately doomed.
This leads to Reed's second point - this is no longer a slippery slope, it is a point that we all need to consider - a government that is big enough to take citizen property through taxation and transfer to factions that are supportive of the executive (various industries, NGOs, labor organizations and community organizations) has power.
Our founding fathers were aware of the, excuse this, power of power, and were concerned enough to consciously make every effort to limit the accumulation and expansion of power at the federal level. Both this consciousness and actual limit have eroded over time - if we think of the ultimate expression of power, it would be to reunite the economic sphere with the political sphere - allowing one group or one person (a dictator/totalitarian) to make decisions dictating outcomes in both areas. In fact the areas are no longer distinguishable and perhaps this leads to a deterioration of society from the open access state back to the natural state or the primitive state (North et al). Or to use Adam Smith's view - a movement from the commercial society back to agricultural or pastoral or hunting.
What also colors the trade off between security and liberty that seems to be at the heart of this discussion is the notion of equity - Reed's final point.
The expansion in scope and breadth of government is motivated, in part, by this very misguided and misplaced sense of equity.
For some reason, over time we have misplaced the sense of equality from:
1. Equality under the law - that is, we are all treated the same in our encounters with the institutions (*formal and informal) of the law (Hayek's view of law). So, if Boyes and I are both accused of theft (a manifest violation of property rights) we are brought before the court and treated the same way.
This has been replaced by
2. Equality of outcomes - Boyes and I have the right (we should post about the inflation of rights and that impact on liberty) to the same, exact salary.
Boyes asks us to consider the ultimate negative sum nature of expansive government.