Friday, September 23, 2005

Economics In Government

Why do I keep talking about economics.  Where am I going?  Wasn't I talking about the Government?  What does economics have to do with government?  Everything.  That's right, everything.To understand why, we'll go over some of the things we've already discussed.
Economics is the study of how people make decisions in a world of scarce resources.
Ok, so economics is the study of how people make decisions on Earth, right, because Earth is a 'world of scarce resources'?  What do we know about government?
The government has one simple function: Force.
Interesting, how does force have to do with how people make decisions?  Well, force decides what decisions would recieve retaliation, right?  Obviously, but why does it matter that we consider force?  Doesn't the government make all the decisions for us?  If something's illegal, do we do it?  I addressed this in my last post:
Just because something is illegal, does not mean it stops occuring.
Oh, ok.  So the government uses force to help us make decisions a certain way, but it is not 100% effective in this means.  This means that the government is a guide for economics, right?  Let's put it all together:
The government uses force to compel people to make decisions a certain way.
But it is not 100% effective, so why use it?  Why are governments instituted?  Let's see if the Declaration of Independence can tell us:
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.
Interesting.  So governments are instituted to compel men to respect each others' life, liberty, and property.  Therefore, the government is instituted so that people's decisions do not interfere with other people's decisions.  This is how we understand that economics is deeply integrated into the concept of governing.  See you tommorrow.
It is not the business of government to make men virtuous or religious, or to preserve the fool from the consequences of his own folly. Government should be repressive no further than is necessary to secure liberty by protecting the equal rights of each from aggression on the part of others, and the moment governmental prohibitions extend beyond this line they are in danger of defeating the very ends they are intended to serve. – Henry George

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