Government cannot create wealth?
Well then, what exactly is wealth and how is it created?
limitgov: Government cannot create wealth? Well then, what exactly is wealth and how is it created?
Wealth is goods and services desired by individuals.
To think deeper about it though, businesses have to have a profit to continue doing business. This means providing goods and services to people that they actually want, at a price they want. What is a profit? A profit can be looked at in terms of goods. This means at the end of the day, one has produced more than one has consumed. If you spend all day laboring to produce two loaves of bread, and you eat both loaves of bread the same day, do you have a profit? No, you just have another day to live. If you spend all day laboring and you produce three loaves of bread, and only eat two, you now have an extra loaf of bread with which you can trade with someone else for something else, like a pencil. The next day you do the same thing, now you have two pencils Eventually you get enough pencils to trade for a chair or a piece of silver. Now, if you only produce 1 1/2 loaves of bread a day, eventually, you will starve to death, because you need to produce at least 2 loaves just to stay alive.
So, the reason governments do not produce wealth, is because they do not have profits. All they have are losses. They always need more money. The reason is twofold. First of all, governments are extremely inefficient. So even if they do produce a good or service that people want, they will do it so inefficiently, that they lose money, and as such, consume wealth by taking from wealth producers to fund their activities (for example, using the bread example, governments will only produce 1 1/2 loaves a day per person). Second of all, many goods and services provided by governments are not desirable. For example, licensing. If governments did not require people to get licenses to do business, no one would. As such, people have to waste their productive efforts buying worthless crap.
I hope this helps.
At most, I think only 5% of the adult population would need to stop cooperating to have real change.
I will defer to George Reisman, who is one of the most eloquent writers I have ever read (Capitalism): Economic Recovery Requires Capital Accumulation, Not Goverment "Stimulus Packages". Also: Ludwig von Mises, The Economic Role of Saving and Capital Goods.
Jonathan M. F. Catalán: I will defer to George Reisman, who is one of the most eloquent writers I have ever read (Capitalism): Economic Recovery Requires Capital Accumulation, Not Goverment "Stimulus Packages". Also: Ludwig von Mises, The Economic Role of Saving and Capital Goods.
dang it...I need something pocket sized for the hannity forum.
limitgov:Well then, what exactly is wealth and how is it created?
It's the result of everyone on this planet waking up every morning and figuring out ways to place themselves in positions/states that are better (in some way) from the ones they are currently in.
Z.
Government can create wealth, like a high-speed train from San Francisco to Los Angeles for an alleged $10B. But it cannot do so without stealing wealth from others to do so, and neither without necessarily retarding or forestalling the creation of or destroying wealth.
To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process. Rabbi Lapin: "Let's make bricks!" Stephan Kinsella: "Say you and I both want to make a German chocolate cake."
Wealth is relative to productivity. As a whole, if their is nothing produced the overall wealth is a minimal, the higher the production the more wealth is created (standard of living rises, etc etc).
Wealth is created throgh immagination. So even a governement can create wealth just by succeeding in making people believe.
Wealth is maybe the good feeling to have just a lot of the things and possibilities you can immagine to have. The less you miss - the more wealthy you feel. The more you feel that might be missing in your life - the poorer you feel if you cannot reach it.
It is logically possible that government could create wealth. In practice it hardly ever does and has much worse incentives that private enterprise to do so.
"I cannot prove, but am prepared to affirm, that if you take care of clarity in reasoning, most good causes will take care of themselves, while some bad ones are taken care of as a matter of course." -Anthony de Jasay
Wealth is created by accumulating productive capital.
See the story of Robinson Crusoe and his fruit-stick.
http://mises.org/rothbard/mes/chap1c.asp#9._The_Formation
The fallacies of intellectual communism, a compilation - On the nature of power
limitgov: Jonathan M. F. Catalán: I will defer to George Reisman, who is one of the most eloquent writers I have ever read (Capitalism): Economic Recovery Requires Capital Accumulation, Not Goverment "Stimulus Packages". Also: Ludwig von Mises, The Economic Role of Saving and Capital Goods. dang it...I need something pocket sized for the hannity forum.
How about a comic book?
Government Explained 2: The Special Piece of Paper
Law without Government
Daniel Muffinburg: Government can create wealth, like a high-speed train from San Francisco to Los Angeles for an alleged $10B. But it cannot do so without stealing wealth from others to do so, and neither without necessarily retarding or forestalling the creation of or destroying wealth.
well, if you're saying gov. can create wealth by spending even more wealth, then that's not really creating wealth technically.
limitgov: Daniel Muffinburg: Government can create wealth, like a high-speed train from San Francisco to Los Angeles for an alleged $10B. But it cannot do so without stealing wealth from others to do so, and neither without necessarily retarding or forestalling the creation of or destroying wealth. well, if you're saying gov. can create wealth by spending even more wealth, then that's not really creating wealth technically.
A government can't create any wealth. It can only consume it. If it could create wealth, it wouldn't need to tax or grant itself special monopoly privileges.
A miniarchist would still insist that there are few services that the market cannot provide, which is why a small government is still needed. However, even if you believe this, you must still acknowledge that the government must, by means of confiscation, divert previously accumulated capital to finance its services.
DD5: limitgov: Daniel Muffinburg: Government can create wealth, like a high-speed train from San Francisco to Los Angeles for an alleged $10B. But it cannot do so without stealing wealth from others to do so, and neither without necessarily retarding or forestalling the creation of or destroying wealth. well, if you're saying gov. can create wealth by spending even more wealth, then that's not really creating wealth technically. A government can't create any wealth. It can only consume it. If it could create wealth, it wouldn't need to tax or grant itself special monopoly privileges.
Are you sure about that?
What about when our government sells treasuries to China or japan?
Wouldn't that be wealth transferred from those countries to our countries?
limitgov: What about when our government sells treasuries to China or japan?
What about it? In this case, instead of directly taxing its people, a government finances spending through debt by selling bonds to foreign investors. The case is the same; the government can only take from previously accumulated capital.