In this Forbes column, John Tamny nails a tremendously important truth: our growing leviathan government doesn’t doom us in a Hobbesian, back to the state of nature way. Rather, its horrible impact is far more in the opportunity cost nature. That is to say, the growth of the state has cost us enormously in living standards due to the waste of capital, diversion of effort, and undermining of productive incentives over the last 80 years or so.
If you remember Amity Schlaes’ talk about Calvin Coolidge, think about this: what if instead of a long succession of presidents who expanded the federal government, we had had a succession of minimal state presidents like Silent Cal. How much good would have come from using our limited land, labor, and capital for market-driven purposes rather than politically-driven purposes over that span of time?
This is asking people to think like Bastiat advocated, taking account of both the seen and the unseen. The wealth that was not created due to the politicization of our economy is the unseen.
If you compare the living standards in, say, Mexico with those in the US today, that difference is probably close to the difference between the actual US today and the US that we would enjoy had it not been for our long slide into the quicksand of cronyism, nannyism, and authoritarianism.