How the State is destructive

The State comes at great cost which creates problems for Society

Our relationship with the State can be characterised by three primary influences:

i) We each receive a gift from the State, in the form of the provision of services or a direct payment of welfare.
ii) The State restricts each of us from behaving as we would without laws.
iii) The State removes wealth from each of us in the form of taxes.

The combination of these three influences comes with great cost to the prosperity of each individual and we can see how each is either destructive or inefficient... To take the gift as our first example: We receive either welfare in the form a (usually) cash payment, or the provision of Government services. It is difficult for an individual to object to a cash payment (although it does influence the behaviour of the recipient, discussed later concerning taxes) so what about the provision of Government services?

Government services are hugely inefficient. It is not because of a personal failing in those providing the service but an inevitable consequence of the method by which those services are rendered. The "customer" has not made a choice in the services provided, which means if the customer is not satisfied it makes no difference to the service-provider. There is no incentive to improve (the service) since payment is not contingent on the service having been chosen by the recipient.

But can the citizen go privately? Yes, of course but services provided in the private sector are artificially expensive not only because they must compete with the "free" State services... The extra expense comes from the fact that the provision of services is often restricted.

So how do State restrictions create poverty? We are prevented from providing for ourselves and from collaborating with those who would assist us due to State restrictions. For example, a doctor must gain State-approved certification before they may practice legally. It is only that the State finds them unsuitable that they are unable to earn a living. It might be that people are willing to pay for their expertise in the free market but their value cannot be tested because of the law. Equally, planning restrictions mean that we cannot build on land which is otherwise available. The State again prevents us from being able to provide for ourselves and maintains artificially high prices.

Taxes are clearly damaging to the person who must pay them but what effect do they have overall? We have less incentive to earn money if a percentage will be taken away by the State so the "producer" will work less hard. The person receiving the benefits of the State will be provided for whether they work or not, so they too will have less incentive to work. It reduces the incentive to work of everyone concerned, both recipient and producer.

So overall, the State is highly costly... and we must weigh the benefits of an ordered society against the many costs which could lead to problems more significant than the safeguards provided by the State.

Wednesday 14th January 2009