http://econ.tulane.edu/RePEc/pdf/tul1107.pdf
there is moderately strong evidence that a states political orientation has consistent and measurable e ects on economic growth; perhaps surprisingly, a more \conservative" political orientation is associated with lower rates of economic growth.
http://onlinelibrary.wiley.com/doi/10.1111/1475-6765.00447/abstract
A pooled vector autoregressive model suggests that during the last century left–wing governments in the United States, Britain and Canada have reinforced the growth of both public spending and GNP.
http://www.russellsage.org/sites/all/files/u4/Bartels_Partisan%20Politics.pdf
On average, families at the 95th percentile of the income distribution have experienced identical income growth under Democratic and Republican presidents, while those at the 20th percentile have experienced more than four times as much income growth under Democrats as they have under Republicans. These differences are attributable to partisan differences in unemployment (which has been 30 percent lower under Democratic presidents, on average) and GDP growth (which has been 30 percent higher under Democratic presidents, on average); both unemployment and GDP growth have much stronger effects on income growth at the bottom of the income distribution than at the top.
And just for lulz:
http://www.people.fas.harvard.edu/~iversen/PDFfiles/LottKenny.pdf
This paper examines the growth of government during this century as a result of giving women the right to vote. Using cross-sectional time-series data for 1870–1940, we examine state government expenditures and revenue as well as voting by U.S. House and Senate state delegations and the passage of a wide range of different state laws. Suffrage coincided with immediate increases in state government expenditures and revenue and more liberal voting patterns for federal representatives, and these effects continued growing over time as more women took advantage of the franchise. Contrary to many recent suggestions, the gender gap is not something that has arisen since the 1970s, and it helps explain why American government started growing when it did.
Expected...
Why would "conservative" states grow faster? The Austrian School is the one that says "growth rate doesn't matter. It is not the point (of economics)."
"A pooled vector autoregressive model suggests"
...that left wingers spend more money, historically.
haha. Yeah, I bet they do.
Using cross-sectional time-series data for 1870–1940
"..., we can see that women spend more money."
Thanks, Harvard!
and it helps explain why American government started growing when it did.
Thanks, ladies! [A joke, don't flame]
Immo, left wing parties 'better' for increased spending and credit expansion - but everybody already knew that.
I wouldn't doubt that there's a fairly strong correlation between the two.
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
Welcome to the forum, Mustang19.
I'm not surprised to see that GDP/GNP is being used as the metric for economic growth in those papers. So I'd say that the biggest issue with their theses is that GDP and GNP in no way take into account broken windows. Basically, then, these papers miss the point entirely.
The keyboard is mightier than the gun.
Non parit potestas ipsius auctoritatem.
Voluntaryism Forum
Welcome to the forum, Mustang19. I'm not surprised to see that GDP/GNP is being used as the metric for economic growth in those papers. So I'd say that the biggest issue with their theses is that GDP and GNP in no way take into account broken windows. Basically, then, these papers miss the point entirely.
Maybe, or maybe economic growth really is slower under conservative governments. The time period under study is very long in these examples, and that problem should show up eventually if it's happening.
GDP/GNP only take into account goods and services produced within a country and produced by labor and property supplied by the residents of a country, respectively. This in no way factors in "what is seen and what is not seen", especially when it comes to government spending. The way GDP/GNP are defined, an increase in government spending means an increase in economic growth (ceteris paribus).
Is GDP growth a bad thing, though? I didn't think it was.
Anyway, I guess Iphones and pop music are examples of how government socialism has undermined the free market. Until better examples are provided, I'll assume that these broken windows are invisible.
"As for the more specific impact of fiscal policies, the generally held presumption is that
mustang19:Is GDP growth a bad thing, though? I didn't think it was.
Like so many other things, it depends. Were windows broken (proverbially speaking) to attain GDP growth?
mustang19:Anyway, I guess Iphones and pop music are examples of how government socialism has undermined the free market. Until better examples are provided, I'll assume that these broken windows are invisible.
Perhaps you'd like to make a counter-argument that doesn't involve mockery. Where did I argue, explicitly or implicitly, that iPhones and pop music are examples of how government socialism has undermined the free market? Furthermore, how exactly are iPhones and pop music the end-all-be-all of economic activity?
Regardless, I think it's unwise in the extreme to assume a lack of proverbial broken windows in today's world.
Broken windows are always hard to see. We do not yet have a device that allows us to see the consequences of actions in another timeline.
They have to be understood rather than observed.
Doesn't the GDP include bombs produced? What happens to those when they are used? The broken windows are not invisible, they are exported.
Cash 4 Clunkers? - One gigantic broken window.
Isn't taxation (income particularly) an example of the broken window? Any money spent by the government (through taxes or inflation) destroys the purchasing power of savers and holders of cash in favor of whatever project is being invested in.
iPhones and pop music are examples of creative destruction.
bloomj31:Broken windows are always hard to see. We do not yet have a device that allows us to see the consequences of actions in another timeline. They have to be understood rather than observed.
Good point, and I think that's in line with what I've been saying. (If it seems to you like I've been saying something different, let me know.) In fact, I'd say the difficulty of observing broken windows is the point behind Bastiat's What Is Seen and What Is Not Seen.
Doesn't the GDP include bombs produced? What happens to those when they are used? The broken windows are not invisible, they are exported. Cash 4 Clunkers? - One gigantic broken window. Isn't taxation (income particularly) an example of the broken window? Any money spent by the government (through taxes or inflation) destroys the purchasing power of savers and holders of cash in favor of whatever project is being invested in. iPhones and pop music are examples of creative destruction.
All of those can be examples of unproductive government programs. However, taken together they add up to only a tiny fraction of what GNP is. With the exception of taxes, which often are put to productive use as public investment. If you think public plumbing and streelights are bad, I think we'll just have to disagree on that.
All of those can be examples of unproductive government programs.
Aaannnd? This negates my point in what way?
However, taken together they add up to only a tiny fraction of what GNP is.
GNP includes iPods made by toothless children in China. Also, GNP is a horrendous statistic that means alomst nothng unless you are examining the world macro economy. The GNP measures the amount of money any of our corporations make and report all around the world. You didn't even respond to my point on GDP in any meaningful manner. You know damn well that bombs is one of the biggest most expensive government programs and chose to change subjects. To write that off while trying to say that liberals grow the economy faster is absurd.
With the exception of taxes, which often are put to productive use as public investment. If you think public plumbing and streelights are bad, I think we'll just have to disagree on that.
You must understand that water and electricity, more often than not, are just city or state granted monopolies to a specific private corporation...Duke Energy is not the government and I do have to pay for energy out of pocket. City utilities are illegitimate monopolies as well they are just funded through local property taxes. If you think "public plumbing and streelights" justify guns in people's faces, we'll just have to disagree on that.
Own up to your support for those bombs.
You know damn well that bombs is one of the biggest most expensive government programs and chose to change subjects. To write that off while trying to say that liberals grow the economy faster is absurd.
Disbanding the military entirely is not a good alternative.
Although the military certainly should withdraw from its foreign engagments, this is a very tangential issue w.r.t. streetlighting and sewage. A price-regulated public monopoly is a whole lot cheaper than an unregulated private one, like the early railroads and the Rockefeller trust.
mustang19:If you think public plumbing and streelights are bad, I think we'll just have to disagree on that.
That's a false dilemma, of course. More specifically, there isn't a dilemma between government-provided plumbing, streetlights, etc. and no plumbing, streetlights, etc. whatsoever.
A price-regulated public monopoly is a whole lot cheaper than an unregulated private one
No. It is not. If it were so, then why would we not want the government to take over production of cell phones, movies, etc.? Duke is a bitch company constantly raising prices and I cannot go anywhere else for the service of energy... How much money does the government get for every gallon of gas your purchase? 55% of your total? (I can't find the graphic I was thinking of...So here is this one)
like the early railroads and the Rockefeller trust.
As soon as Rockefeller could he took over State governments. After 1886 (Santa Clara County vs. South Pacific Railroad), every railroad, bank, and resource corporation went to the government to get monopoloistic privileges. In fact, the only railroad company that did not take subsidies from the government is the only one that did not go bankrupt.
I'm calling 'troll'; ignorance is strong in this one.
No. It is not. If it were so, then why would we not want the government to take over production of cell phones, movies, etc. How much money does the government get for every gallon of gas your purchase? 55%?
Those other markets aren't natural monopolies. A single corporation monopolizing entire rail networks was a major problem before price regulation.
Rockefeller was not involved in SC vs. Rail, nor did he require state governments to maintain his monopoly. It wasn't until the Sherman Antitrust Act that his monopoly was broken.
In many instances, there is. Underinvestment in public infrascture over the past several years has resulted in a decline in the infrastructure stock.
WTF are you talking about? There is no price regulation on cell phones or ebooks... What distinguishment are you making that says that "public sewage and streelights" are natural monopolies? Or are somehow justified? You are trying to justify one monopoly be denigrating a different (pseudo) monopoly; ironically they are both energy companies... (Duke vs. SO) The fundamental lack of choice is still present. The main difference is that Rockefeller, at least initially, did not have State sanctioned monopolistic privilege, Duke does. (you know those harmless and everso justified 'streelights'.)
He wasn't, but the precedent that was set their effected everyone. It meant that States could no longer regulate their corporate charters. That is why the Federal government became so involved. Sherman Anti-trust is a myth. They never made Rockefeller sell any of the companies that came out of Standard Oil. It went from one company owned by Rockefeller to five compaines owned by Rockefeller. Basically, it did nothing to alleviate the problems that you see with it, yet here you are, trying to say that it "solved" the problem... Your argument lacks potency because it lacks understanding of more than just the concepts that make your point, your point.
mustang19:In many instances, there is. Underinvestment in public infrascture over the past several years has resulted in a decline in the infrastructure stock.
And what do you think caused this "underinvestment"?
WTF are you talking about? What distinguishment are you making that says that "public sewage and streelights" are natural monopolies? Or are somehow justified?
It's a matter of whether or not they tend to become monopolies in practice. In a situation where scale economies prevent competition, there has to be some kind of price control preventing monopoly economic profit.
The Sherman Act in itself was just a legal foundation, but it wasn't until the Supreme Court broke Standard Oil up in 1911 that the monopoly ended.
What resulted in underinvestment in infrastructure? Cuts to public infrastructure spending.
This, and that paper, are grasping at sraws. They are defining natural monopolies so arbitrarily that any first comer to any market would be a natural monopolist, then applying the 'theory' to any endeavour that requires large initial capital investments. Is banking an appropriate natural monopoly? States and the Federal Government purposely set that barrier to entry large enough to sink any possible competition.
The same is said for energy and water, what is given state monopoly is done so that competition is not an option. How can you not recognize that the State of today has given Duke the privilege that Rockefeller sought. The economy of scale is the region. You are a troll.
Again, here you are ignoring the point that Standard Oil was only broken up in name. Rockefeller still owned and operated all of them. Literally, nothing changed, except for internal administration. AAANNNnndddd Sherman did nothing. It didn't stop Rockefeller from coming in and swallowing all of the bnaking competition twenty years later. Remind me, why is it that corporations can own stock in each other? Anti-truuu what? You are a troll?
So, without them getting started the point about GDP growth is obvious? You don't need regression models to tell you that spending money will grow the GDP and/or GNP the way they are defined.
Austrians care about legitimate sustainable growth, not speed, party politics, or aesthetics.
Your purpose in this thread is to come here and say, "Look you idiots, there's proof that government works!"
There is only proof that velocity is a thing.
No, I'm not.
In the example you gave, initial capital costs would not be the only factor. Scale economies are important also. As for banking, I am pretty sure that there are more than one or two banks currently in competition with each other. The same can't be said of either pre- or post-regulatory infrastructure monopolies.
The only problem with Sherman is that it didn't do enough. It was still necessary for the Supreme Court to dissolve the monopoly in 1911.
The studies cover a period of several decades. If this unsustainability is supposed to show up eventually, when will it?
mustang19:What resulted in underinvestment in infrastructure? Cuts to public infrastructure spending.
So what does that have to do with private infrastructure spending, exactly?
It doesn't. Private investment failed to pick up the ball.
And why do you think that is?
Regardless, thanks for proving my point that "public infrastructure or no infrastructure" is a false dilemma.
Because the market can fail to allocate investment to infrastructure due to high capital costs and inability to account for externalities.
mustang19:Because the market can fail to allocate investment to infrastructure due to high capital costs and inability to account for externalities.
"High" compared to what? And by whose standard?
"Externalities" according to whom?
But if the market can't allocate "enough" investment to infrastructure, why do you think the government can? In other words, how do you think the government can out-perform the market?
"High" compared to what? And by whose standard? "Externalities" according to whom?
According to the empirical modeling and data presented in the paper.
The government is solvent enough to perform large infrastructure projects without encountering collection costs.
mustang19:According to the empirical modeling and data presented in the paper.
I searched for "capital cost" and "externalit" in that paper, to catch both singular and plural forms. There were only a couple results each, none of which had a clear surrounding context of the type you suggest.
So I'll ask you again: "High" compared to what? And by whose standard? "Externalities" according to whom?
mustang19:The government is solvent enough to perform large infrastructure projects without encountering collection costs.
What definition of "solvent" are you using here?
It doesn't directly present an economic analysis, as it is a review paper, but it does discuss studies that have. Page 4:
The literature on the effects of public investments in infrastructures on economic performance was brought to the limelight by the work of Aschauer (1989a, 1989b). Using a production function approach relating output employment and private capital as well as public capital, the elasticity of output with respect to public capital is estimated to be between 0.34 and 0.39. These estimates were interpreted as implying an annual marginal productivity of public capital of about 70 cents on the dollar and that public capital would pay for itself close to three times in the form of additional tax revenues [see Reich (1991)]. Aschauer’s work led to an explosion in this literature. Subsequent analysis applying the same methodology to international, regional and sector-specific data, however, failed to replicate such large effects and, indeed, it often even failed to find meaningful positive effects. In addition, the approach used in Aschauer’s work and most of the earlier literature was challenged on econometric grounds. It was observed, for example, that OLS estimation of static, singleequation production functions suffer from simultaneity bias and that even if this bias is corrected conclusions about causality still cannot be drawn. These concerns generated a body of literature that branched out into a multivariate static cost-function approach and ultimately into a dynamic multivariate vector autoregressive (VAR) setting considering private sector employment, investment and output in addition to public capital.
What's my definition of "solvent"? The ability to pay for infrastructure that private sources cannot.
mustang19:It doesn't directly present an economic analysis, as it is a review paper, but it does discuss studies that have.
In other words, it doesn't directly present empirical modeling or data that supports your assertion about the market failing to allocate investment to infrastructure due to "high" capital costs and failure to "account" for "externalities". At best, it references other studies that do.
mustang19:Page 4: The literature on the effects of public investments in infrastructures on economic performance was brought to the limelight by the work of Aschauer (1989a, 1989b). Using a production function approach relating output employment and private capital as well as public capital, the elasticity of output with respect to public capital is estimated to be between 0.34 and 0.39. These estimates were interpreted as implying an annual marginal productivity of public capital of about 70 cents on the dollar and that public capital would pay for itself close to three times in the form of additional tax revenues [see Reich (1991)]. Aschauer’s work led to an explosion in this literature. Subsequent analysis applying the same methodology to international, regional and sector-specific data, however, failed to replicate such large effects and, indeed, it often even failed to find meaningful positive effects. In addition, the approach used in Aschauer’s work and most of the earlier literature was challenged on econometric grounds. It was observed, for example, that OLS estimation of static, singleequation production functions suffer from simultaneity bias and that even if this bias is corrected conclusions about causality still cannot be drawn. These concerns generated a body of literature that branched out into a multivariate static cost-function approach and ultimately into a dynamic multivariate vector autoregressive (VAR) setting considering private sector employment, investment and output in addition to public capital.
Nowhere in that passage do I see anything that supports your assertion about the market failing to allocate investment to infrastructure due to "high" capital costs and failure to "account" for "externalities".
mustang19:What's my definition of "solvent"? The ability to pay for infrastructure that private sources cannot.
By that definition, things like fiat money and eminent domain are no issue at all. Why is the government allowed to "pay" for things in ways that the market isn't allowed?
Anyone is perfectly free to build a road. The problem arises when no one does.
I doubt that public infrasctructure could generate enough GDP to pay for itself three times over without some market failure at work.
mustang19:Anyone is perfectly free to build a road.
Are you sure about that?
mustang19:The problem arises when no one does.
And why exactly do you think no one does?
mustang19:I doubt that public infrasctructure could generate enough GDP to pay for itself three times over without some market failure at work.
What basis or bases do you have for this doubt? And do you mean "private infrastructure" instead of "public infrastructure"?
The study refers to public infrastructure. I've discussed my reasoning for the rest.