Every four years the nation gets together and splits itself down the middle on who should be President and which political party should run Congress. Neighbors put up competing yard signs as the glare at one another, bumper stickers will decorate our expensive cars in an effort to somehow persuade someone to change their vote at the stop light, and we all tune in by the millions to watch heated debates and accuse the other side of lying.
This is politics at its best, and this is government at its best. We will continue to negatively review politicians, decrease their popularity ratings, say that the system is the problem and that it is broken, but we thus far have done absolutely nothing to correct it. Instead, we debate over person 1 and person 2 and pick the “lesser of two evils” saying that there is no other option. Why does it always come down to replacing a politician with someone else, when it should be coming down to replacing one system with another?
The issue is not the politicians; it is the government. Economics 101 will teach you that every decision we as individuals make, is made because we perceive it to be in our best interest. Why are people willing to stand in 5 hour long lines for a new Iphone? It is illogical to say, “I waited 5 hours in line because I hate Apple.” It is illogical to say, “I waited 5 hours in line because Iphones hurt me.” It is illogical to say, “I waited 5 hours in line because I do not care about Iphones.” None of those statements are logical and none of them would ever be correct. An appropriate, logical and correct response would be, “I waited 5 hours in line because the new Iphone will offer me benefits that meets my expectations of a smart phone.” It would also be logical to say, “I waited 5 hours in line because my past experiences with Apple has shown that their products work and are of high quality.” Or simply – “I waited 5 hours in line because the benefits I gained from doing so and thus receiving the Iphone is greater than the costs I incurred of doing so.” This concept can be simply referred to as – “Acting in your own self-interest.”
We do things because we perceive the positive consequences to be greater than the negative consequences. Acting in your self interest does not simply mean, “be greedy.” In doing so we analyze direct costs such as monetary costs; we analyze social costs such as the ramifications and potential backlash of those around you and how they feel about your decision; we analyze opportunity costs such as what we could have done had we made an alternative decision instead, and we analyze personal costs such as the emotional and biological costs incurred from making a decision as well. If these costs are less than the expected benefits we will receive from those same descriptive benefits, then the decision is logical.If making decisions based on direct monetary impacts, emotional impacts, societal impacts and relationship impacts is considered greedy, then the term is illogical anyways.
In short: If Benefits > Costs –> Decision is Acceptable
If Benefits < Costs –> Decision is Not Acceptable
Resources are limited in availability, and therefore the efficient allocation of them is what we seek. We want to gain the most benefits, the most utility, or the most happiness that we can by giving up the least sacrifice, the least struggles and the least stress. This is what drives market transactions.
Every single person on the planet is unique. We have a different genetic background; we come from different countries or even territories within a country; we have different educations; we have different friends and family; we have different weather; we have different initial wealth; we have different emotions and experiences. As a result, we all of course value things differently. One person may be willing to spend 2 hours in line for an I phone, while another may be willing to spend up to 10 hours in line. We do this because we place different value upon the item. The more we value it as, the more we are willing to give up for it. In economic terms, we each have our own unique individual demand functions, and we each have our own unique supply functions.
Let’s go back to the system of our government now. As it has been clearly established, as individuals – we act in our self interest. If we act in our self interest, that means you as a consumer acts in your own self interest, your banker acts in their self interest, the doctor acts in her self -interest, your child acts in their self-interest, the car dealer acts in their self-interest, you as an employee acts in your self-interest, the cashier at the grocery store acts in his self-interest, the teacher acts in his self-interest and the engineer acts in her self-interest. We as a society cannot and usually will not even try to refute this economic fact. You go to work because the salary earned is greater than the costs incurred of doing so. The doctor treats patients because the pay and feeling of doing good outweighs the costs of running the business and getting insured. The teacher teaches because the salary and feeling of building up a generation outweighs the cost and hours of doing so. These people are not working for free or doing so just for the sake of doing so. Like established, they do this because they are acting in their self-interest to maximize their benefits. As Adam Smith correctly put it, “It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.”
Someone seems to have been excluded from that list above though. We have the worker, the doctor, the engineer, the teacher… Who is missing? Of course – the politician. Politicians are not excluded. The government is not excluded. Winning an election fairly or unfairly, does not make one an exception to established economic mathematical models. The government is composed of individuals. Individuals act in their self-interest. Each individual has their own unique set of experiences and their own unique demand and supply (benefits/costs) preferences. Therefore it is illogical to believe that a government could ever act in the interest of the population.
As I type this up right now, what am I craving the most? What do I want the most out of everything in the world right now? You of course do not know. Only I know. I know my experiences. You do not. I know my biology and body. You do not. I know my disposable income. You do not. I know what I expect to happen in the short and long run. You do not. So if it is impossible for someone other than you to know your own preferences, how can a governing entity ever efficiently or effectively allocate resources or make decisions? They cannot know even my preferences as a single individual, let alone the preferences of the 330 million people in the United States, or the billions of people in the world.
If they cannot know their constituents, how can they rule? But let us consider if they could know our preferences, should they rule then? If I know that I am willing to wait 5 hours in line for an Iphone and spend $500 on the Iphone, why would I need someone else, some politician, to make a law stating, “Alexander is now granted the right to wait 5 hours in line and spend $500 on an Iphone.” That makes no sense at all. If I am able to freely make a decision by weighing the benefits and the costs on my own, why would we need a middle man to report to to tell them I am willing to spend $500 and 5 hours to get an Iphone so now I have permission to spend $500 and 5 hours to get it?
The fact of the matter is, a government is just as the word describes, an entity that governs. To be governed means to be ruled. To be ruled means to have your actions dictated by someone else. As already established only you can know your own preferences, so it is the government’s objective to act in the ruling people’s self interest, not the population’s self-interest. We are acting in a system to allocate resources. Resources of course includes: money, oil, emotions, food, gold, clean air, water, relationships, toys, medicine, labor… So we willingly elect people to act in their self-interest to allocate money, oil, emotions, food, gold, clean air, water, relationships, toys, medicine, labor… in their interest, not ours.
If they control money, they have the resources and ability to artificially increase prices so that you and I cannot afford them as easily, but so that they can. Take this example where both a Democrat and a Republican’s actions decreased output and forced the allocation of resources away from what you and I would do freely on our own, and to where they personally thought they should be.
Regulations on U.S. manufacturing may reduce output by as much as $500 billion this year, according to an industry-sponsored study that cast doubts on President Barack Obama’s efforts to trim red tape in the federal government.
The Obama administration has established an average of 72 regulations on manufacturers annually, an increase from the 45 per year imposed under President George W. Bush, according to the study, commissioned by the Manufacturers Alliance for Productivity and Innovation, based in Arlington, Virginia.
Let’s say you go to your friend’s house and tell him, “I do not like your yellow shutters, now I am telling you that you have to paint them blue.” Your friend would probably laugh and ask you where you get the nerve to tell them what to do. That was you trying to govern his actions and reallocate resources. Had he felt it was in his self-interest, he would have already had the shutters blue, but yellow appealed to his unique preferences to maximize his benefits when weighed against his costs.
Let’s consider that your friend likes you a lot and takes your opinion to heart and does AGREE to change the color of his shutters. That is a VOLUNTARY action based on acting in his self-interest to increase his benefits. If he values friendship, your opinion, the decreased chance of conflict, less hassle or any combination of more than he what the cost of materials and labor to paint the shutters, he would choose to do so. On the contrary, forcing your will upon someone else is governing them.
Had he been forced to rather than voluntarily choosing to change his shutters, that is not in his self-interest, that is in the self-interest of the governing agent. The homeowner had no issue with the color, the governing agent did. So how does changing the color to blue somehow represent the will of the public? After all, the U.S. government is supposed to be for the people and is supposed to promote their welfare. This simple example just clearly explained how a government’s action can never be for the public’s welfare, but rather it is for only those in control’s welfare. If the principle of government cannot hold up to a simple transaction such as this, how can it stand up to complicated issues of today such as health care, race relations, international trade, space exploration? It can’t.
Despite this fact, the government dictates nearly every aspect of our life. The average taxpayer hands over close to $300,000 unadjusted for inflation in Federal Income Taxes alone in their lifetime. Businesses have annual increased costs in the billions of dollars, but then are criticized when they cannot hire. To get married we have to get permission and file paperwork with the government. We have to hand over our retirement savings in the form of social security to the government (to then be given to others who did not pay into the system, thus bankrupting the program). We are told who we can and cannot date (interracial marriage was illegal, gay marriage is illegal, polygamy is illegal…). We are told what we can and cannot buy. We can have our private property seized against out will. We have our electronic and non-electronic communications monitored. We are told what we can and cannot say and where we can and cannot say it. We are told what to learn and how to think as we are mandated to attend their schools to repeat the ideas that is in their self-interest and not ours. We have our college tuition raised beyond the free market rates. We are told who we have to allow onto our property and who we have to associate with. Should I continue?
Despite these economic and logical facts, many in the public will repeat the same things they have been told in the public (government ran schools that teaches a curriculum in their self-interest) schools or argue something like, “I see what you are saying, but we need SOME government. What about roads? What about the military and police? What about criminals?”
What about them? Basic biological survival depends on food, water and shelter. So what about food? What about water? What about shelter? When you are hungry you voluntarily go to a grocery store. When you are hungry you voluntarily go down the aisles and pick out what you want to eat that night. When you are hungry you voluntarily give up money or other resources to pay for the food you selected. When you are hungry you voluntarily cook the food. When you are hungry you voluntarily eat the food. It is a pretty simple concept. Why are roads an exception? They aren’t, but the government officials have directly and indirectly raised us to believe they are.
We for the most part have a demand preference for roads. We desire and want well-maintained roads. When we INVOLUNTARILY give the government money in the form of theft, I mean taxes, they pay engineers and laborers to build your roads and they pay them not just enough to cover their costs, they pay them a profit. If individuals are profiting from building roads, individuals that work for established organizations… why can that not be done VOLUNTARILY without a government?
Roads are seen as public goods, essentially a product that is consumed as a societal whole instead of individually, but then again, so is electricity, but yet (minus government monopolies) they have figured out systems to bill voluntary consumers on a monthly basis. The government system also encourages the “free rider” problem. This is where one person pays for something, but someone who paid nothing for it gets to use it. Let’s say you bought your kids a pool and set it up in your back yard, how would you feel if you woke up and had strangers swimming in it? That is the free rider problem caused by government services/public goods. In a voluntary system of exchanges, you pay what you are willing to give up to receive what you want to maximize your well-being. Roads could function under a subscription services, a voluntary agreement to pay set amounts into the construction and maintenance, or through tolls. As a matter of fact, some governments pay for their road services through tolls anyways. They put up tolls long enough to pay for the cost of building the road, and then the tolls are removed.
The Bert T. Combs Mountain Parkway was built in the early 1960s and opened in January 1963 as Kentucky’s second toll road. The route was originally signed only as the ‘Mountain Parkway’. In the late 1970s, the “Bert T. Combs” name was added to honor the governor from the mountains who spearheaded construction of the highway. Auxiliary plates were added above the circular Mountain Parkway signs to mark the designation.
As with all of Kentucky’s toll roads, the tolls were removed as the construction bonds were paid off. Tolls were removed from the four-lane section in 1985, and the road became a freeway in 1986 when the remaining tolls were removed from the two-lane section.
The exact same way the government pays for roads, expect on a voluntary basis instead of forcibly taking your money and artificially raising prices through regulations and the inability to have competitive pricing, roads could be built, maintained and paid for.
The same concept goes for police, firefighters, paramedics and all other social public services. Historically speaking, these services actually used to be done without the government, but was taken over.
As for crime, there is logic behind the madness of criminals. Criminals too are acting in their self-interest and measuring their benefits against their costs. For whatever circumstances in their life, they value obtaining the resources in the manner they are doing so that is viewed negatively by the public as higher than the risk of being caught and punished and the social backlash. As demonstrated above, police can be ran without the government. Even in the event that it could not be, we have a government now, but yet crime continues to happen and continues to increase. So even if no government was not a solution to crime, government is certainly not a solution either. In reality though, crime and other socially frowned upon actions such as murder, rape and theft would still face consequences in a system without government just as they do in one with a government. One cannot logically say, “If I do not have a President in charge of me I am going to sit and watch a guy rape and murder my wife.” It is as illogical as it is outlandish.
To summarize, government acting in the public’s best interests and promoting the general welfare is a convoluted and illogical statement and argument. By the very nature of society, of people, of economics and reasoning skills, the idea that entities and people put in charge of others while conflicting against their self-interest will somehow be for the better of everyone makes no sense. It is impossible for others to know one another’s preferences and form public policy to promote it, and since the individual is already acting in their self-interest and on their preferences, having an entity do the same would be redundant and illogical as well. All benefits that could be offered through a government that is done so through the theft of resources can be done so in a more efficient and voluntary basis. If the same benefits offered by a government is offered at a lower price, it is logical that the alternative method be chosen. After all, why would you pay $500 for your Iphone if it is offered to you for $400?