Friday, March 18, 2011

Government is a collective monopoly produced by politicos?

From an economics point of view, attempts rein in government spending and balance government budgets is in essence arguments to rein in spending and balance budgets of a collectivist organization. That is, the entire budget/operation of the government is in fact collectivist based and delivered through monopoly.

Hence the arguments to rein in the spending/balance the budget are basically arguments about the spending/budget of a collective based entity delivering its services through monopoly. However, its still a collectivist based organization regardless of spending patterns.

Spending is merely a symptom

Lets say you are successful in reining in spending and balancing a collective monopoly's budget. Then you have only succeeded in temporarily reining in the spending attributes of a collectivist based organization. That is, the real and basic problem is the collective itself and the monopolistic delivery system.

The collective will always accommodate rent seekers (special interests), will always suffer from the phenomena of "shirk", the purveyor of the public collective (politicos) will always attempt to use tax payer money for political constituency building through the mechanism of government as well as accommodate rent seekers, and the collective itself and purveyors of the collective will always attempt to solve its problems through additional monies (taxes).

Therefore, if you are successful in reining in spending it will be a temporary phenomena as the collective itself, by its very nature, will grind down the path of collectivism and seek more money to accommodate its attributes/organization/essence.

The collective monopoly, by, for and of the politico
If one was successful in reining-in and balancing the budget of an existing collective based organization the next step in to bust the collective monopoly. How?

It probably boils down to an observation by F.A. Hayek (paraphrasing): nowhere is it written in economics that the "state" must provide services. The state's obligation is to collect tax money. The services then can be provided by the private sector or state. State has chosen arbitrarily to provide services themselves in order to enlarge itself. The enlargement was done by, for, and of politicos for power. That is, the "state" doesn't think, discuss, or decide......only politicos think, discuss, decide. Politicos have decided to enlarge state by providing the services by the state as an avenue to additional power.

To bust the collective monopoly all services beyond protective services (police/fire) should be privatized when ever possible (which is the vast majority of the time) and the state's job is to merely collect tax and then pay for the public services rendered by the private sector. By busting the collective monopoly you create efficiencies which lower costs, lower rent seeking possibilities, lower “shirk”, lower political constituency building, and lower the power of politicos in general. Hence removing the collective monopoly is to remove the major cost driver.

However, to remove the cost driver of collective monopoly is to dismantle the politico's avenue to power. The politico has chosen to expand the state by delivering public services through a collective monopoly. The cost driver is of no meaning to the politico, the meaning is power.

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