Dear Friends,
It seems to me it is a self evident fact that government could regulate poverty. In other words, government could enact regulations that are so absurd, all economic activity would come to a halt. In fact we see this very thing in North Korea and in other impoverished places around the World.
Let’s make a ruled line, with this level of absurd regulation at one end, and the other end being zero government regulation. The ruled space between the ends will be the various levels of regulation that a government can have as they pertain to economic activity. The scale would be 1-10.
If government regulation is at the zero end, it is peddle to the metal, economic growth (as far as regulation is concerned). With the all the shenanigans that go along with zero regulation. Like the 1920’s in the US. Low regulation very high growth. Or regulation can be closer to the other end of the scale like the slow growth of the 1930’s in the US.
Another factor in economic output is the level of taxation. It is self evident that government could enact such a high level of taxation that all economic activity, above the table, would cease. This would be the end of another ruled line with zero taxation at the other. The scale would again be 1-10.
We can then place the two ruled lines on a graph. Regulation being the x axis and Taxation being the Y axis. Then we can plot the level of government interference with economic activity. With this scale we can clearly see the implications of government policies on economic activity in a country. The other factors effecting actual economic outcome are cultural effects like animosity to capitalist, thought, behavior, work ethic etc… These cultural effects can outweigh anything a government tries to enact to improve the lot of it’s people.
That is not to say, if cultural effects are such that economic activity is effectively suppressed, that government should not try to be as frictionless to economic growth as possible. Doing so allows the paltry local relative advantages to be better exploited. This in turn allows the people to better their standard of living.
To use cultural animosity to market activity as a reason to coddle people is simply a means to trap them in poverty. Government providing for people who have been taught to hate market activity is a recipe for famine and want. People live best when people can provide for themselves. Independence in a market economy is as close to real independence a human being can have.
Engaging in the market system in this way knocks the rough edges off cultural ethics that are in conflict with the market system. Just like it did Christianity at the end of the Dark Ages. People who grow up in later generations will find the market system to be less vexing. The cultural animosity will be lessened by the obvious improvement in the standard of living of the people.
This scale of government’s friction to an economy is helpful to countries with mature economies as well. Mature economies tend to build up more and more absurd regulation. It might have had a place and time but the nature of government is to grow not to self control. So regulations tend to build up on the books. Leading to needless Red Tape. The bureaucratic friction gums up even the lowest taxed economies.
It is important for government to occasionally look at it’s regulation. Perhaps even having a semi annual audit of it’s regulation. Every effort should be made to find people who are honest brokers to pour over every page of regulation and suggest ways to lower not only the amount but the intrusiveness as well.
Were this to happen; I believe the economies of the World would be unleashed. The standard of living of the people of the World will go up dramatically in every way. Take government‘s foot off the throat of the people and people will thrive. But step down even harder to maintain control, because the Elite have destroyed the people’s ethos, and you have universal poverty.
So it boils down to this… Measure and control government’s effect on the economy and have universal opulence or allow government to bear down harder and harder on our collective economic throats and have universal poverty.
In the end it is our choice; not the Elite’s.
