Government Makes People Produce More

Economics Economics Questions
1

Government makes people produce more. You have to produce enough for you to live off of…and then produce more for the government to steal from you.

In a truly free market, you would only have to produce enough for you to live on. With the government in the picture, you have to produce extra (your share plus their stolen share).

In this way, governments stimulate economies. That is they force people to produce more than they normally would.

On a side note, I’m wondering if governemnt was invented by aliens. They go around…when they see a planet that they want to cultivate and take resources from, they introduce the idea of government to the primtive people that live there. This forces more production out of the people, and possibly speeds up getting a civilization where they need it to be at.

There are probably other alien beings out there, who will free us from government. Simply by allowing many of us to leave the planet…thereby taking away all the slave labor from government. It can’t exist if people leave.

2

Well, assuming that the government is taking the extra money and giving it to someone else, there’s still a net of 0 work happening. Say the first person needs 1 unit of ‘work’ to successfully feed, clothe, etc. himself. However, the government takes 50% of his work. This means he’ll complete 2 units of work so that he can keep his necessary 1 unit and give the other 1 unit to the government. The government would then give the 1 unit to someone else who ‘needs’ it, and the second person wouldn’t be doing any work because they’re getting their requirements solely from government handouts.

In a free market, both people would need to complete 1 unit of work each in order to feed, clothe, etc. themselves. Overall, there are still 2 units of work completed in all, so the economy would be stable. The only difference is that someone wouldn’t have to work, and eventually the first person wouldn’t work either, so the government ends up stifling the economy.

3

If you followed this to its logical conclusion wouldn’t that mean that if the government took everything that someone produced that they would produce infinitely? This does not take into account the disutility of labor and the fact that the marginal utility of leisure would eventually overtake the marginal utility of additional labor. Not to mention that if someone has to work more because of the loss of the product of their labor then they would have to forgo the satisfaction of other ends (spending time with family and friends for example) and necessarily have a lower level of satisfaction or quality of life than they otherwise would have. This argument sounds a lot like the broken window fallacy.

4

Cernel makes a very good point but I’ll agree that, with some needed modifications, yours too is a very valid point.

If we assume that without coercion people would not “progress” (in the materialistic economic sense) beyond a certain point (ex. they wouldn’t save anything at all), than coercion makes them cross that point. In the long run, government predation could stimulate the evolution of humans that, absent coercion, would ‘progress’ infinitely, in turn undermining the basis of government itself. In this sense governments might exist only because of (and perhaps only to eliminate) this ‘defect’ of humans (satiation at a certain point).

Or perhaps no one ever got satiated by what he had and this theory is BS.

5

“This means he’ll complete 2 units of work so that he can keep his necessary 1 unit and give the other 1 unit to the government. The government would then give the 1 unit to someone else who ‘needs’ it”

if only it worked that way…that would be more efficient…

if you make 10…and the government takes 5…they aren’t giving away 5…

they destory wealth…and send it down black holes…

we’ll be lucky if they give away 1.

6

Psychologically, people are probably only willing to work so much. To avoid starvation, humans would probably work every waking hour. But when it comes down to providing non-essential goods, a 40 hour working week seems about what people are willing to work. So give or take away their resources, they’ll work the same.

7

Yeah, I understand that. I was just saying that, even at a “100%” efficiency, the government could never statistically create more production under the best circumstances.

8

“Yeah, I understand that. I was just saying that, even at a “100%” efficiency, the government could never statistically create more production under the best circumstances.”

perhaps we should be thinking about it in a different way. that is, they’ll just force innocent people to produce more.

sort of like having a parasite on your back…now all of a sudden you have to eat more to sustain yourself and the parasite.

9

Government can force people to save more, thus make high order production profits increase and increase productivity.

10

“In a truly free market, you would only have to produce enough for you to live on.”

This is false. Since the future is inherently uncertain, people will always be somewhat conservative and save some wealth for unforseen contingencies, and as a result will usually end up with a surplus.

Also, people’s wants go far beyond bare subsistence and are generally limitless until we live in a perfect paradise.

11

"

“In a truly free market, you would only have to produce enough for you to live on.”

This is false. Since the future is inherently uncertain, people will always be somewhat conservative and save some wealth for unforseen contingencies, and as a result will usually end up with a surplus."

Good point…lket me restate…in a free market…you produce whatever you want to live on and save…with government…you produce all of that…plus the government’s share.

12

We are way past providing food for ourselves… We’re able to reach less urgent needs like the new ipod and crab dinner. If the state confiscates your wealth, those are the things you don’t buy.

But if you REALLY want to press it, yes. If the state literally took away 99% of my income, I would have to work 80 hours a week because I need food.

13

That is a very good analogy for this situation. But then you have to remember that if you stop eating/working, the parasite/government will die too. It shows how dependent the government is on its citizens.

14

Forcing people to save more will create unneeded investments, not more prosperity. And we all know where that road gets you.

15

Many non-producing support services are required to support the Agriculture, Mining, Technology, Construction and Industrial Productive activities of a family, tribe, island, or nation. Civilized nations have always taxed the productive population to pay for National Security, Armed Forces, Crime Prevention, Police, Fire Protection, Education, and other similar items that assist, support and protect and prevent interruption of the agricultural and the industrial production bases that supplied the things that the entire population consumed.

Industrial and Agricultural Bases could not generally exist with foreign invasion, crime, protection rackets, corruption, sabotage, etc., disrupting the production. A portion of the income earned by this producing base has always been taken by taxation to pay for governments to prevent these occurrences that would otherwise interrupt the production of the things that the citizens need to sustain civilized life.

Maybe the US government can no longer afford to spend these hard earned taxes and so many borrowed US dollars on wars, social entitlements, welfare, unemployment, healthcare, environmental clean-ups, digging holes today then re-filling the same holes tomorrow, pork barrel projects, free educations, free medicine, subsidized housing, humanities, art, music, sculptures, writing poems, make-work schemes, entertainment, etc., and/or similar things that does not contribute positively to reducing our foreign trade balance or support to our citizens that produce the food, shelter and clothing necessary for maintaining the lives of the US population.. These things are nice but the USA cannot afford these expenses until we re-establish our economic strength. These things take tax US dollars and employ people to do things that do not accumulate wealth for the family, tribe, or nation.

16

Gerald Spencer: Many non-producing support services are required to support the Agriculture, Mining, Technology, Construction and Industrial Productive activities […] National Security, Armed Forces, Crime Prevention, Police, Fire Protection, Education, and other similar items […]

I think you are mis-defining productive. Could you supply a definition please?

Civilized nations have always taxed the productive population to pay for […]

[…] A portion of the income earned by this producing base has always been taken by taxation to pay for governments […]

Fallacy: Appeal to Tradition. The fact that something was done a certain way in the past does not imply that that was the best way to do it, or even a remotely good way.

[…] Industrial and Agricultural Bases could not generally exist with foreign invasion, crime, protection rackets, corruption, sabotage, etc., disrupting the production. […]

What you’re getting at is that prosperity cannot happen without actual (enforced) property rights. That is correct, but it does not logically follow that governments must provide these services.

[…] wars, social entitlements, welfare, unemployment, healthcare, environmental clean-ups, digging holes today then re-filling the same holes tomorrow, pork barrel projects, free educations, free medicine, subsidized housing, humanities, art, music, sculptures, writing poems, make-work schemes, entertainment, etc., and/or similar things that does not contribute positively to reducing our foreign trade balance or support to our citizens that produce the food, shelter and clothing necessary for maintaining the lives of the US population.. These things are nice […]

What makes them nice? Do you mean it would be nice to have them for free? Sure, I guess, but that can’t happen in the universe we live in. Every good or service that is scarce requires some human labor to procure, or requires the use of someone’s owned property in order to procure. So don’t think this way.

By the way, “reducing our foreign trade balance” is a mercantilist goal. In an unfettered free market, trade balances always adjust toward equilibrium; no need for a government to intervene at all.

[…] support to our citizens that produce the food, shelter and clothing necessary for maintaining the lives of the US population. […]

They aren’t our citizens, they’re self-owning acting individuals who happen to work toward the production of food etc. Why does everyone else have to focus on these people? Every product that people currently consume must be produced in the future in order to “maintain” the status quo. By why are you trying to make the world static, anyway?

[…] the USA cannot afford these expenses until we re-establish our economic strength. […]

You are picking an arbitrary level of prosperity and trying to hold it. Why? After we “re-establish our economic strength”, why should we stop growing? Why should we waste resources then, but not now?

Commenting on your entire post,

  • You are way too holistic. Your focus on collectives (us, we, our…) doesn’t make sense.
  • You mention arbitrary boundaries like tribe, nation, etc. when there is no reason to think inside these boundaries.
  • You are too materialist. You talk about “Agriculture, Mining, Technology, Construction and Industrial Productive activities” and are concerned for the welfare of “Industrial and Agricultural Bases”. I would urge you to take a wider view.
  • You think from a nationalist/mercantilist perspective. Your goals are exclusively building up resources in the United States without mentioning anyone else. Why do you want to aggrandize the power of the U.S. government, anyway?

I’m glad that you understand that massive U.S. expenditures are causing problems, and you’re definitely come to the right place to flesh out your ideas! I’d urge you to look around this site and read up on concepts like subjective utility, prosperity, and economic exchange.

17

That’s an interesting idea, but I’m not sure it’s true. Nowadays, people in the United States work about 40 hours per week, but it wasn’t always that way. A hundred years ago, a 40-hour work week would have been considered light, yet most people were beyond bare subsistence at that time. Granted, this is only anecdotal evidence, but you also have to remember that the current 40 hour workweek is heavily influenced by the massive disincentives for work that our government creates.

Whatever the case, I strongly disagree with your final sentence. Government intervention massively changes work incentives. At one end of the spectrum, if you don’t work at all, government gives you some food, some income, some health care, etc., massively lowering the uneasiness (to use Mises’ term) experienced by individuals at this end of the spectrum. At the other end, if you studied very hard in school and work 12 hours a day, government will slap you with massive taxes amounting to perhaps half your income. Thus, the utility gained by working this hard is perhaps half of what it would be otherwise, and many people that might have chosen to work this hard will choose not to.

As a side note, I just noticed that the spell checker doesn’t recognize the word “Mises”! Who designed this system?!

18

Source for working week here. But right. Maybe sustenance levels aren’t all humans will strive for above all else. I would probably work an 80 hour week for toilet paper if I had to. The point is that (im speculating) there’s a minimum level of comfort we appear to be willing to grind ourselves to the bone for, and anything in excess of that is meh.

That’s poor writing on my part. I meant “give or take” ~ “more or less” ~ “roughly”, as opposed to the logic working both ways. Of course if you give people free stuff they’ll stop working, particularly if their next highest wants can’t be satisfied by current markets (flying cars, laser toothbrushes (teethbrush?))

Here I agree too, but I think this logic applies more to the wealthy than to the middle class, who’s working week has stayed at 40 hrs despite massive improvements in real wages. For the investor who makes a calculated business decision, risk/rate of return, etc, taxes are hugely discouraging. Even a 10% flat tax would un-economize large numbers of projects.

You are probably one of the first to notice there is a spell checker. Most people on these forums either don’t care or won’t risk having their ego’s shattered. I wouldn’t dare touch it…