George Leef’s latest Forbes column relies on the wisdom of Frederic Bastiat to explain that the American economy could be much more prosperous without all the government meddling that has held it back.
In his October 28th column, John Tamny raised a point that I believe calls for further elaboration — under interventionist economics, we never know the prosperity we are missing.
He wrote, “More realistically, the massive forest fire isn’t government debt that is easily financed, but how extraordinarily low our standard of living is relative to what it could be.” (My italics.)
Absolutely right – we’re prosperous, but would be far more so if it weren’t for decades of government economic meddling that has wasted resources, squandered capital, and distorted incentives. But because lost prosperity is unseen, very few people think about it.
Anyone familiar with the writings of the French economist and philosopher Frederic Bastiat will recognize here his most famous contribution, namely the need to consider not just immediate and visible consequences of action, but also the long-run and usually unseen consequences. …
… The federal government’s increasing diversion of limited resources away from market-driven uses and into politically-driven ones over the last 85 years (you have to go back to Calvin Coolidge’s administration to find one where the weight of the federal yoke did not increase) has greatly diminished the prosperity we would otherwise have.
Through the tax system, the government seizes vast amounts of money from people like Bastiat’s shop owner – money that would otherwise have been invested or spent or perhaps donated according to the individual’s assessment of the balance of benefits versus costs – and uses it for government spending. The government hires an army of bureaucrats, few of whom do anything that the taxpayers would choose to pay them to do. Much of the work of the bureaucrats in fact impedes the productive efforts of business owners, entrepreneurs and workers.
The government also uses tax dollars to buy things that politicians want, but provide little or no benefit to the taxpayers, such as prodigiously expensive foreign trips, unnecessary military hardware, funding for crony capitalist enterprises, and websites that don’t work.