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> the government is not a value-generation enterprise This is incorrect. The value generated by providing a stable framework in which people can go about their

> the government is not a value-generation enterprise This is incorrect. The value generated by providing a stable framework in which people can go about their daily lives is incredible. It's hard to measure this value, of course, but our modern way of life is impossible without this framework.

moralsupply 7y ago
Without prices it's not possible to measure the "value" of goods or services. Which is the same thing as saying that without prices there's no "value" generated. The government makes its own money (generating inflation, which is taxation on savings), and takes money from people through taxation in various ways. It then spends that money in any way it wants, without a price system to signal where that money should be spent. Therefore, it ends up generating "malinvestments", where money is poured in the government functions, social programs, war, "economic incentive" programs, etc. according to the current political agenda, which is generally of low time preference (as politicians have to keep promising on things they can deliver within their mandates). The modern state (which dates from the 1700's) might have had its historical justification on the basis of making management costs smaller (as in: property records, basic infrastructure, etc.). But as time goes by and technology improves, making both management and transaction costs diminish, the need for a centralized state becomes less important. The problem, however, is that governments want to persist (as they have a large amount of politicians and public workers), and instead of lowering taxes and being less invasive over time, they are progressively doing the opposite.
- atq2119 7y ago
  > Without prices it's not possible to measure the "value" of goods or services. Which is the same thing as saying that without prices there's no "value" generated. It's really, really not the same. Just because you can't measure something properly, that doesn't mean it doesn't exist. Just how absurd that thought is becomes obvious when you translate it to a different topic: Magnetic fields did not spontaneously begin to exist when humans started to be able to measure them accurately, for example. What it does mean is that we don't have as good an understanding of the concept of value as we have of electro-magnetism. That's not surprising, of course, since the inherent complexity of the notion of value is much greater.
  - moralsupply 7y ago
    If you provide a good or service and nobody wants to pay for it, what is its value? Exactly zero, no matter how much effort you've put into it. If the government takes money (either through taxation or inflation) from you and spends it at will, creating malinvestments, what value did it produce? Negative value, meaning that if it didn't take money from individuals, they would use it in a way that would provide actual value to them (measured by the price system).
    - atq2119 7y ago
      Let's say a friend organizes a party and you go there. You don't pay for it, yet you enjoy what they did. Clearly, their organization of the party provided some value -- it's just not the kind of value you put a price on. Look, of course you can insist on using a definition of value that is 100% tied to price by definition, but that's rather myopic -- and why are you using the word "value" in the first place then? You should just be using the word "price" instead, because that's what you mean. The vast majority of use of the term "value" by people in practice attempts to capture some essence that goes beyond market price. For many goods, market price can be a decent approximation of this more elusive notion of value, but that's all it is: an approximation. Or a (leaky!) abstraction, if you prefer to think of it that way. Heck, even in finance, it's not as simple as "value = price". For example, when analyzing firms you can look at market value vs. book value. Both can be thought of as "the value of the firm", but they're basically always different.
      - moralsupply 7y ago
        When you go to a party, you "pay" for it with your time, which is priceable. On your comment about market value and book value, both are measured in monetary terms. The thing here is that we can't come up with an abstract definition for prices and values where anything goes and then use it to justify something economically unsound such as the government activity.
        shock-value 7y ago

moralsupply 7y ago

Without prices it's not possible to measure the "value" of goods or services. Which is the same thing as saying that without prices there's no "value" generated. The government makes its own money (generating inflation, which is taxation on savings), and takes money from people through taxation in various ways. It then spends that money in any way it wants, without a price system to signal where that money should be spent. Therefore, it ends up generating "malinvestments", where money is poured in the government functions, social programs, war, "economic incentive" programs, etc. according to the current political agenda, which is generally of low time preference (as politicians have to keep promising on things they can deliver within their mandates). The modern state (which dates from the 1700's) might have had its historical justification on the basis of making management costs smaller (as in: property records, basic infrastructure, etc.). But as time goes by and technology improves, making both management and transaction costs diminish, the need for a centralized state becomes less important. The problem, however, is that governments want to persist (as they have a large amount of politicians and public workers), and instead of lowering taxes and being less invasive over time, they are progressively doing the opposite.

atq2119 7y ago
> Without prices it's not possible to measure the "value" of goods or services. Which is the same thing as saying that without prices there's no "value" generated. It's really, really not the same. Just because you can't measure something properly, that doesn't mean it doesn't exist. Just how absurd that thought is becomes obvious when you translate it to a different topic: Magnetic fields did not spontaneously begin to exist when humans started to be able to measure them accurately, for example. What it does mean is that we don't have as good an understanding of the concept of value as we have of electro-magnetism. That's not surprising, of course, since the inherent complexity of the notion of value is much greater.
- moralsupply 7y ago
  If you provide a good or service and nobody wants to pay for it, what is its value? Exactly zero, no matter how much effort you've put into it. If the government takes money (either through taxation or inflation) from you and spends it at will, creating malinvestments, what value did it produce? Negative value, meaning that if it didn't take money from individuals, they would use it in a way that would provide actual value to them (measured by the price system).
  - atq2119 7y ago
    Let's say a friend organizes a party and you go there. You don't pay for it, yet you enjoy what they did. Clearly, their organization of the party provided some value -- it's just not the kind of value you put a price on. Look, of course you can insist on using a definition of value that is 100% tied to price by definition, but that's rather myopic -- and why are you using the word "value" in the first place then? You should just be using the word "price" instead, because that's what you mean. The vast majority of use of the term "value" by people in practice attempts to capture some essence that goes beyond market price. For many goods, market price can be a decent approximation of this more elusive notion of value, but that's all it is: an approximation. Or a (leaky!) abstraction, if you prefer to think of it that way. Heck, even in finance, it's not as simple as "value = price". For example, when analyzing firms you can look at market value vs. book value. Both can be thought of as "the value of the firm", but they're basically always different.
    - moralsupply 7y ago
      When you go to a party, you "pay" for it with your time, which is priceable. On your comment about market value and book value, both are measured in monetary terms. The thing here is that we can't come up with an abstract definition for prices and values where anything goes and then use it to justify something economically unsound such as the government activity.
      - shock-value 7y ago