Tuesday, February 10, 2015

Somebody Ought To….

 I was reading something about the views of some tax payers on the right, who think the government is just an extractive institution. The problem is that the individual relationship with the state is a symbiotic relationship. It then becomes part of the environment so much that it is forgotten that it is even there. 

It starts from a state of nature, but in a large industrial society, there needs to be coordination of public goods. These are the things that everyone needs but few are willing to pay the upfront costs. It’s why transport was limited in the first 100 years of the country. 

The state helps coordinate transportation – somebody ought to help trade the interior, it was said. There was no private company willing to dig a big ditch. So the Governor of New York said, let’s do this. 

The same was with the railroads and helping utilities lay right-of-ways. 

So that’s fine. We have public goods. But how do you trade? You need to facilitate trade in some way. In a small community, you have your word and reputation. In a larger environment, you need something else. Somebody ought to arbitrate contracts and set the rules for the market place. So you have a government step in.

Now you have travel and commerce taken care of. How do you protect your property that you gained through that trade? Somebody ought to help out and protect private property. It’s too expensive to hire one guy for your own property.  Maybe you get together with some other local property to hire a guy to patrol everyone’s property. But who sets the limits on what that guy can do? You need a code of rules and regulations to say what he can or cannot do.

But why does that property need protection? Because for whatever reason there are people who covet what you own, much of these are losers on the transportation or the trade that was set up. What if instead of protecting your property, you made it so that you could help these people so that you did not be afraid for your property. What if you could do this at a lesser cost than it takes to protect your property and punish the trespassers?

Congratulations, you just built a functioning state. Now the real questions are about priorities and allocations of the funds you gained because the state set up the conditions for your prosperity. It is not that the state is being extractive, but about how much you are willing to share with the society that is only possible because of state coordination.