Tuesday, May 22, 2007

government for children, by children

We all heard the terms before--
  • "have your cake and eat it too"
  • TANSTAAFL ("there ain't no such thing as a free lunch")
  • "putting the cart before the horse" (the ability to consume without having to first produce)
In Human Action, Mises aptly describes this child-like behaviour of blindly holding an irrational belief that the wholism of government is godlike in the aspect that it can produce goods ex nihilo.
At the bottom of the interventionist argument there is always the idea that the government or the state is an entity outside and above the social process of production, that it owns something which is not derived from taxing its subjects, and that it can spend this mythical something for definite purposes. This is the Santa Claus fable raised by Lord Keynes to the dignity of an economic doctrine and enthusiastically endorsed by all those who expect personal advantage from government spending. As against these popular fallacies there is need to emphasize the truism that a government can spend or invest only what it takes away from its citizens and that its additional spending and investment curtails the citizens' spending and investment to the full extent of its quantity.

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