So much for the "risk-free" nature of Treasuries

[Lowe]

I'm sympathetic to the notion that the government's organizing the canal might be masking the private sector's desire to build it in a different way, or a relative lack of interest in a canal at the time. Really, I am. But I think the result speaks for itself. Maybe nobody in the private sector thought a canal was necessary but realized its importance after it was built, in a similar way to how nobody thought computers were going to be a big deal until Apple and Microsoft put them on everybody's desks. That's the whole point of entrepreneurship. You take a risk that most people weren't willing to take and would have ridiculed before its success.

I doubt the Canal could have been commissioned if few in the private sector thought it was a good idea.  Everyone who holds office in the public sector is either also in the private sector, or has a stake in the private interests which support him.

I agree with everything in your summary comment.  The third item doesn't say much to me, since I don't know what negative consequences are.

...

In reply to Gumby, I was going to ask him how he knows Robert didn't mean net wealth, since wealth is usually taken in the broadest sense, unless a specific person is referenced.  However I see Robert contrasts wealth creation with redistribution, which suggests variation among people or places, and therefore locality.

You could ask these questions about competing private sector entities as well, and the answers would be the same (well, except for the last question -- I think that there is no private sector analog to war.)

There's also no private sector analog to drug laws.

If places like Manhattan are any indication, and the complete lack of evidence of anything like that being reasonably possible within a "free society," I have to think that the government can indeed create a mecca of wealth creation, which is, in turn, creation of wealth in itself.

One of the most salient features of NYC is that it is in the US, which has had the most liberal economy since... always.  In that liberal economy it is coastal, on a river, and one of the oldest settlements.

[Gumby]

In reply to Gumby, I was going to ask him how he knows Robert didn't mean net wealth, since wealth is usually taken in the broadest sense

He may have. He wasn't clear. We seem to have a group of people on this forum who keep saying the government "never creates wealth". If they mean net wealth, they ought to clarify to avoid confusion. But, I still don't see how the Erie Canal doesn't create net wealth. It created more wealth than anyone's wildest dreams. Were there a few unintended consequences from the canal. Yes. But, they pale in comparison to the empire that it facilitated and we certainly aren't poorer because of it. If we are, nobody has explained how that is so beyond those logical fallacies.

[Kshartle]

If signing a EULA is voluntary, and that neutralizes or minimizes the moral implications of the government's violence backing it up, does that mean that the fact that buying a private sector bond is voluntary neutralizes or minimizes the government's violence backing up the taxes it expects you to pay on your interest and capital gains?

In each case, you can avoid the violence by abstaining from the action that has government violence attached to it.

How do you abstain from paying taxes, by dying? In that case, everything is voluntary, because you can kill yourself.

Or maybe not: perhaps that is why suicide is illegal. 

Abstaining from investing to avoid taxes does not avoid them. It's like saying I'm going to move to the woods to get free of government. You're not free silly woodsman. You've sacrificed the benefits of society to avoid people extorting you and telling you what to do but they are still doing it. You are in the woods eating squirrels because the chance to really live as you want has been taken away. You can't avoid it because your gun isn't big enough and everyone around supports the use of violence against you if you disagree.

If you don't buy the bond because you don't want to pay the taxes you have to do something else or just pay the inflation tax.

[Pointedstick]

If you don't buy the bond because you don't want to pay the taxes you have to do something else or just pay the inflation tax.

How do you abstain from paying taxes, by dying? In that case, everything is voluntary, because you can kill yourself.

Or maybe not: perhaps that is why suicide is illegal. 

Well, we were talking about those bonds, and you abstain from paying taxes on bonds by not owning them. And I can abstain from signing EULAs by never using a computer. Neither are practical. The point I'm trying to make is that "avoidability" doesn't strike me as an especially useful measure here. Buying a bond and signing a EULA are both voluntary, private transactions that have government force backing up aspects of them. Abstaining from them of course requires doing something else.

You can't avoid it because your gun isn't big enough and everyone around supports the use of violence against you if you disagree.

Exactly. Might makes right. Story of human history. Heck, it's the story of all life. Get mighty or get whacked. Always has been, always will be.

[Gumby]

If you don't buy the bond because you don't want to pay the taxes you have to do something else or just pay the inflation tax.

When New York State issued the bonds and built the canal, it didn't print money. New York State is a currency user — just like every other state. And the cost of shipping and transportation to the midwest went down considerably (not up).

[Lowe]

But, I still don't see how the Erie Canal doesn't create net wealth. It created more wealth than anyone's wildest dreams. Were there a few unintended consequences from the canal. Yes. But, they pale in comparison to the empire that it facilitated and we certainly aren't poorer because of it. If we are, nobody has explained how that is so beyond those logical fallacies.

Isn't the argument about whether the state creates net wealth, the Erie Canal being an example?

If I had to guess, the economic loss of WWI alone is probably a hundred times the economic gain of the Erie Canal.  It's hard to imagine anything like that could happen, outside the public sector.

[Kshartle]

Exactly. Might makes right. Story of human history. Heck, it's the story of all life. Get mighty or get whacked. Always has been, always will be.

Same with slavery right? Same with child sacrifice. Same with women not owning property. Same with not worshiping the same God.

The human story is not written. It's being written. It's not human nature to be violent anymore than it is to be Muslim. When you grow up being taught something you believe it. 95% of the country was Christian at one point. Was it human nature to be Christian? Was it...American nature? Nope. If violence is worse than non-violence we'll pretty much all figure that out at one point and teach our kids that and put it away as a tool to solve problems. People who use it will be put aside and rejected or dealt with. There will be economic costs to using it that will make it the tool of the deranged. They will not profit from it.

Try buying some slaves. Do you think it's the government that prevents it? How about child sacrifice? Do we need laws to prevent that also?

[Kshartle]

But, I still don't see how the Erie Canal doesn't create net wealth. It created more wealth than anyone's wildest dreams. Were there a few unintended consequences from the canal. Yes. But, they pale in comparison to the empire that it facilitated and we certainly aren't poorer because of it. If we are, nobody has explained how that is so beyond those logical fallacies.

Isn't the argument about whether the state creates net wealth, the Erie Canal being an example?

If I had to guess, the economic loss of WWI alone is probably a hundred times the economic gain of the Erie Canal.  It's hard to imagine anything like that could happen, outside the public sector.

NAZIs and Soviets (wow governments)

The one we've got over here breathing down our necks looks increasingly like the love child of this two-sides of the same coin statist-incest.

[Kshartle]

Exactly. Might makes right. Story of human history. Heck, it's the story of all life. Get mighty or get whacked. Always has been, always will be.

Same with slavery right? Same with child sacrifice. Same with women not owning property. Same with not worshiping the same God.

The human story is not written. It's being written. It's not human nature to be violent anymore than it is to be Muslim. When you grow up being taught something you believe it. 95% of the country was Christian at one point. Was it human nature to be Christian? Was it...American nature? Nope. If violence is worse than non-violence we'll pretty much all figure that out at one point and teach our kids that and put it away as a tool to solve problems. People who use it will be put aside and rejected or dealt with. There will be economic costs to using it that will make it the tool of the deranged. They will not profit from it.

Try buying some slaves. Do you think it's the government that prevents it? How about child sacrifice? Do we need laws to prevent that also?

Sorry if the tone sounds harsh. I don't mean it to. We're typing a lot on heavy subjects (which I'm ok dropping in favor of something lighter). Sometimes things come across more confrontational than people mean I'm sure.

[Pointedstick]

Sorry if the tone sounds harsh. I don't mean it to. We're typing a lot on heavy subjects (which I'm ok dropping in favor of something lighter). Sometimes things come across more confrontational than people mean I'm sure.

It's cool.

As to your point, it's not that it's human nature to be violent, rather, it is the nature of all life. In order for life to exist, it must destroy other life, either directly or indirectly.

Now, just because that's our nature as humans, as animals, as participants within an ecosystem, that doesn't mean we always have to be like that. Of course not. Human societies are social affairs where we agree to abstain from a certain amount of violence in order to have the benefits of social interaction without having to constantly be on edge.

My point is that our nature informs everything about us, even when we try to overcome it. If you look deeply at all human societies, they're all engaging in a massive dominance struggle for power, resources, etc. Clearly we haven't managed to overcome this part of our natures just yet.

[Kshartle]

Sorry if the tone sounds harsh. I don't mean it to. We're typing a lot on heavy subjects (which I'm ok dropping in favor of something lighter). Sometimes things come across more confrontational than people mean I'm sure.

It's cool.

As to your point, it's not that it's human nature to be violent, rather, it is the nature of all life. In order for life to exist, it must destroy other life, either directly or indirectly.

Now, just because that's our nature as humans, as animals, as participants within an ecosystem, that doesn't mean we always have to be like that. Of course not. Human societies are social affairs where we agree to abstain from a certain amount of violence in order to have the benefits of social interaction without having to constantly be on edge.

My point is that our nature informs everything about us, even when we try to overcome it. If you look deeply at all human societies, they're all engaging in a massive dominance struggle for power, resources, etc. Clearly we haven't managed to overcome this part of our natures just yet.

We haven't all overcome it, no argument. If it's true, we'll get there. We'll all figure out and accept what's best and teach it to our children. Not in out lifetimes but hopefully we get to see great strides. I think we have. Talking about the prez does make me want to vomit but imagine explaining in the 50s that we'd have a non-100% Caucasion president or that only displaying animosity towards homosexuals would be shunned by most people.

Destroying other life doesn't translate into destroying other humans though. That's a difference. It will always be ok to eat a plant or a chicken or have a dog as a pet, we just won't be doing any of that to our fellow man.

[Gumby]

But, I still don't see how the Erie Canal doesn't create net wealth. It created more wealth than anyone's wildest dreams. Were there a few unintended consequences from the canal. Yes. But, they pale in comparison to the empire that it facilitated and we certainly aren't poorer because of it. If we are, nobody has explained how that is so beyond those logical fallacies.

Isn't the argument about whether the state creates net wealth, the Erie Canal being an example?

If I had to guess, the economic loss of WWI alone is probably a hundred times the economic gain of the Erie Canal.  It's hard to imagine anything like that could happen, outside the public sector.

I don't think you get to include all governments on the planet into your equation just because the New York State government builds a canal. It's a bit much. Those are completely different governments in different times. You might as well blame Julius Caesar for WWII while you're at it.

Or are you suggesting that the economic success of New York and the Midwest contributed to WWI? That seems like a strange way to denounce economic success. It seems beyond obvious to me that the New York State government managed to create net wealth when it built the canal.

[Lowe]

I don't think you get to include all governments on the planet into your equation just because the New York State government builds a canal. It's a bit much. Those are completely different governments in different times. You might as well blame Julius Caesar for WWII while you're at it.

Or are you suggesting that the economic success of New York and the Midwest contributed to WWI? That seems like a strange way to denounce economic success. It seems beyond obvious to me that the New York State government managed to create net wealth when it built the canal.

I think I do get to consider all gov't, since this is about gov't broadly, as I understand it.  You offered an example, and now I offer one, which doesn't have to be the same era.  H/e if you'd like one closer, the American Civil War splits the difference, about.  The economic loss is similarly larger *.

The Erie Canal is surely a positive contribution to net wealth, so it goes on the left side of the ledger.  There are other entries on that side, like the Space Program, although most are more ambiguous than the Canal.  I see some big entries on the right, though.  Things like wars, and Prohibition, and some more ambiguous than those.

I'm not placing them on the ledger because of the Canal, or because of Julius Caesar, etc.  AFAIK there's no causal relationship between any two things.


EDIT : * than the economic gain of the Canal

[Gumby]

I think I do get to consider all gov't, since this is about gov't broadly, as I understand it.  You offered an example, and now I offer one, which doesn't have to be the same era.  H/e if you'd like one closer, the American Civil War splits the difference, about.  The economic loss is similarly larger *.

Sure, you can believe whatever you want about all governments. But I was talking about a State government building a canal for its region in order to create wealth — not Julius Caesar or WWII. If you want to change the subject to something broader, that's certainly your prerogative — though I think you'd be stating the obvious. As for me, I was just trying to show an example of a State government creating wealth, which I did.

The Erie Canal is surely a positive contribution to net wealth, so it goes on the left side of the ledger.

That's all I was trying to prove anyway. I'm glad we can agree on that.

There are other entries on that side, like the Space Program, although most are more ambiguous than the Canal.  I see some big entries on the right, though.  Things like wars, and Prohibition, and some more ambiguous than those.

You are stating the obvious. We all agree that governments are often destructive. My only goal was to prove that it was possible for governments to do something that creates wealth.

[Lowe]

Well, it's not a matter of my personal beliefs, or any beliefs.  Assessing whether the state is a net wealth creator requires that you make a ledger in much the way I am describing, even if you neglect among the negatives the hidden costs libertarian might insist on.

Had Robert been clear that he was referring to net wealth, as in our living standard, would his statement, that gov't does not create wealth, have made more sense?  In that case there would be many examples he could provide to back his claim that the ledger sums to a negative number, though no number of examples would be proof positive.


EDIT : I suppose your example suggests that gov't might be a net wealth creator?  Is that what you mean?

[Gumby]

Well, it's not a matter of my personal beliefs, or any beliefs.  Assessing whether the state is a net wealth creator requires that you make a ledger in much the way I am describing, even if you neglect among the negatives the hidden costs libertarian might insist on.

Except I'm not trying to prove that all governments are net creators of wealth. You're making a straw man argument. I'm simply trying to explain that a government is occasionally able to create wealth on an individual project.

Had Robert been clear that he was referring to net wealth, as in our living standard, would his statement, that gov't does not create wealth, made more sense?

Yes. I think if you read through the thread you would have seen that Moda asked if a bridge created wealth (that was the question in response to Robert's assertion that governments "never" create wealth). So, I rolled out the example of the Erie Canal to show that a government project could create wealth. I never said governments always or often create wealth.

In that case there would be many examples he could provide to back his claim that the ledger sums to a negative number, though any number would scarcely be proof positive.

Again, he'd be stating the obvious. I'm not really impressed.

[Lowe]

It doesn't appear Robert was speaking to net wealth, so it doesn't matter much.  I was curious, though, because you wrote the following, with my emphasis added.

He may have. He wasn't clear. We seem to have a group of people on this forum who keep saying the government "never creates wealth". If they mean net wealth, they ought to clarify to avoid confusion. But, I still don't see how the Erie Canal doesn't create net wealth. It created more wealth than anyone's wildest dreams. Were there a few unintended consequences from the canal. Yes. But, they pale in comparison to the empire that it facilitated and we certainly aren't poorer because of it. If we are, nobody has explained how that is so beyond those logical fallacies.

As I understood the terms, creating net wealth would be moving the ledger's sum into positive territory.  From what you're saying, that's not what you meant.



ADDENDUM :

Yes. I think if you read through the thread you would have seen that Moda asked if a bridge created wealth (that was the question in response to Robert's assertion that governments "never" create wealth). So, I rolled out the example of the Erie Canal to show that a government project could create wealth. I never said governments always or often create wealth.

I saw moda's comment about roads.  I was the first to reply to it, as well, and in that post I mentioned that the argument hinged on the necessity of the state, not on the necessity of roads.  Most roads demonstrate value, after all.

[Gumby]

It doesn't appear Robert was speaking to net wealth, so it doesn't matter much.  I was curious, though, because you wrote the following, with my emphasis added.

He may have. He wasn't clear. We seem to have a group of people on this forum who keep saying the government "never creates wealth". If they mean net wealth, they ought to clarify to avoid confusion. But, I still don't see how the Erie Canal doesn't create net wealth. It created more wealth than anyone's wildest dreams. Were there a few unintended consequences from the canal. Yes. But, they pale in comparison to the empire that it facilitated and we certainly aren't poorer because of it. If we are, nobody has explained how that is so beyond those logical fallacies.

As I understood the terms, creating net wealth would be moving the ledger's sum into positive territory.  From what you're saying, that's not what you meant.

I was just trying to figure out how the act of a government building a canal could result in people being "poorer" — which was KShartle's actual argument that I was trying to refute. If he had simply said that governments are just generally destructive, in a broader sense, I would have agreed with him. But, I can't agree with him that the actual building of the Erie Canal made us poorer.

[notsheigetz]

I was just trying to figure out how the act of a government building a canal could result in people being "poorer" — which was KShartle's actual argument that I was trying to refute. If he had simply said that governments are just generally destructive, in a broader sense, I would have agreed with him. But, I can't agree with him that the actual building of the Erie Canal made us poorer.

I once had the fascinating experience in my youth of going through locks that were a remnant of the Erie Canal on a canoe trip.

It's hard to conceive of that having a negative economic impact at the time but extrapolating it into the future I can equate it with boondoggles like Solyndra and see how it makes some people poorer (namely me as a U.S taxpayer who got nothing out of it.)

[moda0306]

I was just trying to figure out how the act of a government building a canal could result in people being "poorer" — which was KShartle's actual argument that I was trying to refute. If he had simply said that governments are just generally destructive, in a broader sense, I would have agreed with him. But, I can't agree with him that the actual building of the Erie Canal made us poorer.

I once had the fascinating experience in my youth of going through locks that were a remnant of the Erie Canal on a canoe trip.

It's hard to conceive of that having a negative economic impact at the time but extrapolating it into the future I can equate it with boondoggles like Solyndra and see how it makes some people poorer (namely me as a U.S taxpayer who got nothing out of it.)

Your taxes didn't pay for it. Usage fees did.

[fnord123]

I took Gumby's argument to mean that government can create wealth. Not always, and perhaps not most of the time, but it can. In the case of the Erie Canal, the "net" term was in the context of that canal.  Ie the canal created more wealth than it destroyed - not in the context of all world history.

Let me ask a question to the folks who believe government is always a net destroyer of wealth. Where are the examples of non-government to hold up as counter examples?  The walled city sounds like a pretty miserable place.  Somalia and other failed states are also generally pretty terrible places as well. Life for most of humanity in the pre-nation state era was pretty bad - but even then, the people in more organized civilizations had better lives than those outside them. Are there any examples of places With no  government that are paragons (other than fictional places such as Galt's Gulch)?

[Gumby]

I took Gumby's argument to mean that government can create wealth. Not always, and perhaps not most of the time, but it can. In the case of the Erie Canal, the "net" term was in the context of that canal.  Ie the canal created more wealth than it destroyed - not in the context of all world history.

Precisely.

I was just trying to figure out how the act of a government building a canal could result in people being "poorer" — which was KShartle's actual argument that I was trying to refute. If he had simply said that governments are just generally destructive, in a broader sense, I would have agreed with him. But, I can't agree with him that the actual building of the Erie Canal made us poorer.

I once had the fascinating experience in my youth of going through locks that were a remnant of the Erie Canal on a canoe trip.

It's hard to conceive of that having a negative economic impact at the time but extrapolating it into the future I can equate it with boondoggles like Solyndra and see how it makes some people poorer (namely me as a U.S taxpayer who got nothing out of it.)

Your taxes didn't pay for it. Usage fees did.

Right, but I think he might have meant the annual maintenance for New York State taxpayers going forward. Although, in reality the money to run the canal currently comes from New York State Thruway (highway) tolls, not taxes:

See: http://www.democratandchronicle.com/art ... 310140028/

It's like ~$80 - ~$90 million a year to maintain all 524-miles of the canal, but the canal still brings in much more revenue than that (an estimated $380 million annual impact) to the local towns and businesses as a tourist and recreational attraction. In other words, even today the Erie Canal is still creating wealth for upstate New York. So, it's considered a State asset that has value in being maintained (and the State constitution requires it to be maintained). The problem is that nobody really enjoys paying for that asset out of their own accounts.

[Lowe]

I took Gumby's argument to mean that government can create wealth. Not always, and perhaps not most of the time, but it can. In the case of the Erie Canal, the "net" term was in the context of that canal.  Ie the canal created more wealth than it destroyed - not in the context of all world history.

Let me ask a question to the folks who believe government is always a net destroyer of wealth. Where are the examples of non-government to hold up as counter examples?  The walled city sounds like a pretty miserable place.  Somalia and other failed states are also generally pretty terrible places as well. Life for most of humanity in the pre-nation state era was pretty bad - but even then, the people in more organized civilizations had better lives than those outside them. Are there any examples of places With no  government that are paragons (other than fictional places such as Galt's Gulch)?

I don't know what always a net destroyer of wealth means.  Is it whether the state, as an institution, has contributed positively or negatively to living standards over time?

I don't know the answer, but if I were going to find it, I would have to address confounding variables.  Life before nation states was worse than life now for many reasons, some of which may have nothing to do with nation states or their absence.  States themselves may only be the result of other trends.

I think societies tend to act in way that mirrors how the individuals act, so changes in institutions are only a reflection of changes in individuals.  Definitely nation states are more humane than kings were, who in turn were more humane than chieftains were.  H/e I think this is b/c people generally became more humane with each generation, not because the state, king, or chief imposed it.

Progressive improvements in farming, nutrition, and child-rearing, increasing intelligence and empathy in each successive generation, probably explain almost all improvement in living standards since prehistory.  They probably also explain increasingly large and complicated social organization, with higher in-group inclusion, which I think nation states reflect.  Whether nation states are actually peacemaking agents which positively feed back into this trend, I don't know.

They seem increasingly obsolete.  The monetary system could be run nearly as it is now, by a cooperate among the large banks.  Is national defense even a real concern?  The terrorism which is used to justify the military, is caused by the military.  As for a social safety net, can't charities do that?  If there is a demand for these things, what reason is there to think that someone won't try to meet that demand?

[Pointedstick]

Yes. Yes. Yes. Yes. Right on pretty much all counts, I think. I see the state withering as people become more self-actualized and corporations continue to replace its functions with less violence, lower cost, and higher quality.

As to what timeframe we're looking at? Who knows.

[moda0306]

Yes. Yes. Yes. Yes. Right on pretty much all counts, I think. I see the state withering as people become more self-actualized and corporations continue to replace its functions with less violence, lower cost, and higher quality.

As to what timeframe we're looking at? Who knows.

What do corporations do better than government today in ways that are fundamentally different than a long time ago.

The way I see it, the more population density we see, the more entangled the state will be in our daily lives... Though not as overtly cruelly coercive ( I would hope we're done with mass genocides).