Hi all I’m a neophyte here and need your help. I’m in college and naturally surrounded by statists and socialists. I’m having an argument with a friend who claims that increases in technology bring the greatest growth to the economy. Following that train of logic, he then claims that all “really smart people” who want to go to college shouldn’t have to worry about the cost of it and we should pay for it. Investing in these smart people would lead to increases in technology and hence maximize economic growth. He dismisses the Austrian definition of economic growth and is in love with big government. Needless to say he is very difficult to reason with. What should I tell him to persuade him otherwise? Thanks.
Technology in the abstract isn’t anything anyone studies. We must choose what technologies to study. How is the government suited to make these choices?
He sounds like one of those idiots who think technology by itself implies growth. It doesn’t. Technological growth requires capital investment, in order to pay off and even exist in the first place. So he should get his head out of whichever dark place it is located, and realize that the government can no more foster technological growth than it can make gold out of paper.
I think the whole technology argument can be easily countered by giving the examples of communist countries.
The Soviet Union, North Korea, Cuba… they all had/have the same technology as everyone else, and if not they could/can buy it, and yet their population is uncomparably poorer then in the rest of the world.
He’s got the cart pushing the horse.
Technology in itself is a result of a broader cause for economic growth - specialisation.
Division of labour and specialisation can on its own, in the absense of technological growth, achieve economic growth. However, it is through specialisation that technological progress is achieved. When people focus on one area of study, they make discoveries.
This is a natural market process driven by the motivation for profit, and not something the government can induce. Governments, as in pretty much everything else, can only hamper the market. By reallocating resources as the government sees fit, it distorts the market and hence distorts those technological advances that are being demanded, all on the basis that the government is somehow more able to decide what people want than the people themselves.
If he doesn’t understand this, tell him about the government sponsored military research programmes that have created Nuclear weapons and biochemical weapons, as well as all the advances in normal forms of warfare. In the absense of these government run weapon programmes, we would never have had the terrible threat of nuclear war, nor the many genocides that were accomplished only due to biochemical weapons. Many wars were started because one side thought they possessed more advanced technologies in warfare.
And knowing all of this, ask your friend, how can he trust the government to allocate research resources? The US government already spends something like a quarter of its budget on the military, and no doubt a lot of that goes into research. If you want peace, leave the government out of technologies.