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Small Government

Here is a story about Joe the Republican who supposedly has a nice life because of liberals whom he does not appreciate. I respond with a story about what life would be like in my (libertarian) world. In my world, we've had libertarian policies for centuries, so the effects are already everywhere.
Joe gets up at 6 a.m. and fills his coffeepot with water to prepare his morning coffee. The water is clean and good because some tree-hugging liberal fought for minimum water-quality standards. With his first swallow of water, he takes his daily medication. His medications are safe because some stupid commie liberal fought to ensure their safety and that they work as advertised.
Steve gets up at 8 a.m. and drinks fresh orange juice delivered at 7 a.m. The juice is delicious, fresh, clean, and good because Steve pays for the best. Steve takes his medication and feels safe remembering how all the drug companies that refused to be carefully audited and regulated by a trusted third party company -- at their own expense -- went out of business as the public made the smart choice: only buying from companies they trust.
All but $10 of his medications are paid for by his employer's medical plan because some liberal union workers fought their employers for paid medical insurance -- now Joe gets it, too.
Steve thinks back to the old days when his medications might have cost $10 out of pocket. He feels so much happier paying $50 for higher quality medication -- he's worth it. He laughs at the men who thought they were saving money in the past. Money doesn't come from laws. When employers pay for medicine, they offer lower wages.
Joe prepares his morning breakfast; bacon and eggs. Joe's bacon is safe to eat because some girly-man liberal fought for laws to regulate the meat packing industry.
Steve eats his morning gourmet breakfast. He's glad he rarely cooks for himself anymore: he was never very good at it. Now he works an extra half hour per day (which he enjoys doing) instead of cooking. It saves him time. And he pays specialists to cook his food, and deliver it fresh. People who are actually good at it. The extra work more than pays for the cooking services because of economy of scale.
In the morning shower, Joe reaches for his shampoo. His bottle is properly labeled with each ingredient and the amount in the total contents because some crybaby liberal fought for his right to know what he was putting on his body and how much it contained.
In the shower, Steve reaches for the shampoo. He only uses it once a week: competition led to innovation, and now shampoos leave special residues that keep hair clean for about 10 days. The bottle is carefully labeled with a web address where Joe can read the ingredients it contains, as well as peer reviewed scientific studies about each ingredient, and about the effects of the shampoo as a whole. Joe isn't a scientist, but he can understand everything because the shampoo company hired an independent watchdog company to write explanations for the layman. Joe knows he can trust the less scientific version because the watchdog company vouches that it was not edited, and is accurate. In the past sometimes watchdog companies vouched for bad things. But they went out of business and there hasn't been a significant mistake for 50 years. They are certainly more reliable than any government agency ever was, thanks to competition and consumer choice. Big companies only hire watchdog companies that do an excellent job of demonstrating to the world their credentials and gaining public trust.
Joe dresses, walks outside and takes a deep breath. The air he breathes is clean because some environmentalist wacko liberal fought for the laws to stop industries from polluting our air.
Steve dresses and steps outside. The air is clean because his country is so rich. Everything comes from smaller numbers of larger, more efficient factories which were only able to be built due to huge amounts of capital. And consumers are happy to pay slightly higher prices for cleaner products because they have the money to buy everything else they value more. Clean air easily makes the cut. Companies that refused to make environmentally safe products went out of business long ago.
He walks on the government-provided sidewalk to subway station for his government-subsidized ride to work. It saves him considerable money in parking and transportation fees because some fancy-pants liberal fought for affordable public transportation, which gives everyone the opportunity to be a contributor.
Steve walks along the toll sidewalk to the subway station. Usually he works from home over the internet. When he goes to work, usually he drives or hires a driver (so he can spend the trip reading, thinking, or working on his laptop). But today Steve is in the mood to meet someone new, so he rides the subway and chats with other passengers. Steve's GPS-enabled watch pays for the sidewalk use, and he briefly holds it in front of a scanner to use the subway station. Steve pays more money for transportation than he would have in the past. He's glad to. The subway company is fast, efficient, and courteous due to competition with other private transportation companies. The sidewalks are kept in good repair at a low price, also due to competition. In the old days when the Government subsidized these things the quality was lower because consumers had no choices. And no one really saved any money because the Government paid for these things with tax money. Now that taxes are so much lower, Steve actually comes out well ahead of Joe even though he pays more money out of his wallet.
Joe begins his work day. He has a good job with excellent pay, medical benefits, retirement, paid holidays and vacation because some lazy liberal union members fought and died for these working standards. Joe's employer pays these standards because Joe's employer doesn't want his employees to call the union.
Steve begins his day at work. He has a good job with excellent pay: about 10 times what Joe used to make. The reason Steve is paid so well is that he receives no medical benefits, paid holidays, or retirement benefits. Steve pays no union fees. After buying the top quality medical care of his choice, paying for his own holidays, and saving for retirement, Steve still makes more money than Joe. And his taxes are much lower, so he keeps a larger proportion of his salary. And prices on private goods are lower due to increased competition and decreased Government regulation. And the goods are all higher quality than the Government used to regulate they be, and they are now regulated more carefully and safer by private organizations. Governments never did anything efficiently. Steve has no need for a union. If his employer treated him poorly he would just work for himself, or work for a competitor. Competition for labor improves working conditions.
If Joe is hurt on the job or becomes unemployed, he'll get a worker compensation or unemployment check because some stupid liberal didn't think he should lose his home because of his temporary misfortune.
If Steve is hurt he'll receive insurance money. This is because he has purchased personal injury insurance. Steve is glad that his employer only pays him when he does work. He would feel bad to take money for nothing. But he realizes it isn't for nothing: if his employer had to offer worker compensation or unemployment checks, then his wages would be lower. And if there were Government unemployment benefits, his taxes would be higher. Overall Steve comes out richer buying his own insurance. And competition insures the insurance company is reliable, and run efficiently, and has very low profit margins. Steve couldn't ask for a better deal.
It is noontime and Joe needs to make a bank deposit so he can pay some bills. Joe's deposit is federally insured by the FDIC (or the NCUA, if he's part of a credit union) because some godless liberal wanted to protect Joe's money from unscrupulous bankers who ruined the banking system before the Great Depression.
At noon Steve makes a bank deposit. His bank has purchased insurance from five of the most reliable insurance companies. If things go wrong, they actually stand to be paid 3 or 4 times the cost of the problem. This is just in case an insurance company were to go out of business. It reduces risk. Due to choices by people like Steve to pay more for lower risk, banks are more reliable and dependable than ever in history.
Joe has to pay his Fannie Mae-underwritten mortgage and his below-market federal student loan because some elitist liberal decided that Joe and the government would be better off if he was educated and earned more money over his lifetime. Joe also forgets that his in addition to his federally subsidized student loans, he attended a state funded university.
Steve pays his mortgage and student loan bills. He pays market rate for them. Interest rates are high because the demand for money today is high: everyone wants to create productive enterprises and this effect is even larger than the large supply of money and capital. Steve doesn't mind because he can afford it. And he knows he isn't getting a bad deal: due to competition, profit margins are low, and loan companies are run economically.

Steve wouldn't want the Government to subsidize his education. That would mean higher taxes and overall he'd end up poorer. But worse than that, education is very important to Steve. He paid for top quality teachers and facilities. He would hate for the inefficient touch of Government to reduce competition and damage his learning. And that -- knowing less -- most of all, would make Steve poorer.

Steve always wondered why the poor, working class people who don't attend college put up with paying taxes to help send middle class people to college, and to fund State colleges mostly attended by middle class people. He schedules a lesson with his favorite historical tutor for next week. He tells the tutor what he will be asking about in case he needs to prepare. The lesson isn't cheap, but Steve values his time, and he values learning from top experts, and he can afford it because his knowledge makes him more productive, which means he is better paid. Steve shudders to think what life was like when people stopped their educations before they were 30 instead of continuing them throughout their lives.

The video footage of Steve's lesson will be posted online at pennies per viewing. Steve has found that he actually makes significant money from doing this because he asks very good questions that many people are interested in, and because he hires very good tutors who other people also like to hear wisdom from. Due to competition, the website offering the video footage only keeps a 10% cut. Steve gets the other 90% that people pay to view his lesson.
Joe is home from work. He plans to visit his father this evening at his farm home in the country. He gets in his car for the drive. His car is among the safest in the world because some America-hating liberal fought for car safety standards to go along with the tax-payer funded roads.
After work, Steve drives to visit his father at his farm home in the country. His car is among the safest in the world because customers have valued safety for the last century, and car companies have had intense competition to provide the best safety backed up by the most reliable oversight by independent companies, and the most persuasive scientific tests, with the most publicly accessible and readable documentation and explanation of the evidence behind the claims of safety.

Steve's car's GPS system pays for the use of the toll road. Private roads means competition, low prices that beat the old prices paid for in taxes, and better and more economical road maintenance. The road companies also adjust speed limits in real time and send the current speed limits straight to everyone's car. That means people can always go as fast as is safe to. People think of the limits more as very good recommendations. Steve shudders to think of the days of one single speed limit determined by bureaucrats. Government never did anything right.
He arrives at his boyhood home. His was the third generation to live in the house financed by Farmers' Home Administration because bankers didn't want to make rural loans.
Steve arrives at his boyhood home. It was purchased with the help of capitalists who loaned his father money for the home. They were happy to take a somewhat higher risk on a rural house because they charged higher rates to make up for it, and they used the extra money to buy insurance to reduce their own risk. Companies offering rural loans made more profit than those that didn't and soon they all did.
The house didn't have electricity until some big-government liberal stuck his nose where it didn't belong and demanded rural electrification.
The house didn't have electricity until Steve's father paid for electrical lines. Now that there are more neighbors, they pay Steve's father for the use of his electrical lines. Or at least they used to until Steve's father sold the lines to an electric company. The electric company paid Steve's father more than the lines were worth to him, because they are more profitable when run by a larger company that already has maintenance crews and all the knowledge of how to deal with electrical lines. It also already has convenient billing systems, customer support, and safety standards.

Steve's father paid for quality, and paid lower taxes, and owned his own lines. He prefers it that way.
He is happy to see his father, who is now retired. His father lives on Social Security and a union pension because some wine-drinking, cheese-eating liberal made sure he could take care of himself so Joe wouldn't have to.
Steve's father lives on his savings. Parts of his savings are in three different commercial retirement plans. The rest is invested. Steve's father chose the retirement plans and investments that were best for him. He is proud to take care of himself; Steve doesn't have to.
Joe gets back in his car for the ride home, and turns on a radio talk show. The radio host keeps saying that liberals are bad and conservatives are good. He doesn't mention that the beloved Republicans have fought against every protection and benefit Joe enjoys throughout his day. Joe agrees: "We don't need those big-government liberals ruining our lives! After all, I'm a self-made man who believes everyone should take care of themselves, just like I have."
Steve is a self-made man who takes care of himself.

Summary:
  • Competition lowers prices.
  • Specialization lowers prices.
  • Competition increases innovation.
  • For every use of tax money that directly helps you, and you think you could never afford without taxes, there are dozens of other Government expenditures, also paid for with your tax dollars, that don't help you at all. Overall you lose.
  • Government funded stuff is not a free lunch. It's paid for in taxes. Overall it costs more, because government is inefficient (no market competition, poor accountability).
  • Companies will be accountable, responsible, and pay for regulators if customers will pay for these things. It will be cheaper for customers, and higher quality, than if companies are forced to do this by law.
  • Benefits from employers come straight out of your wages. It's better to get a health plan or retirement plan from a specialist, with full choice of which to buy.
  • One of the kindest things you can do for the poor is to make it legal for them to pay less for lower quality. Making poor people pay the costs of all the things Governments deem "everyone needs" is cruel.
  • Regulations force companies to do what Government bureaucrats think is best. Competition forces companies to do what their customers want.

Elliot Temple on April 14, 2007

Comments

I can't see the other comments *scratches head*

petty, but I'd hope that Steve and most other people will have caught on in this new society that shampoo is a big self-perpetuating scam... it only takes about a month for your scalp to get totally used to being cleaned with just water and a firm massage once a week or less. Oil production actually starts to match what the scalp needs when you take shampoo out of the equation.

Anonymous at 12:44 PM on April 25, 2007 | Permalink
oh - that was me.

Emma

Anonymous at 12:46 PM on April 25, 2007 | Permalink
Dear Elliott;
You are bloody good, and well entitled to propose your own site as an example of intellectual intercourse.
Dare I invite you to look at my own blog, [email protected], of which the content should appeal to you?
The peace of the Lord!
Brian W. Firth

Anonymous at 2:45 PM on November 4, 2008 | Permalink

have a look at 19th century Britain

Well guess what: the society you are dreaming of had already been established (and I am not talking about Somalia here)
The country where both the steam engine and Capitalism first truly came into being (i.e. Britain) did not waste time on government regulations or high taxation.
Therefore child labour was not at all limited by any "liberal" laws (btw. we Europeans tend to think of "liberal" policy as creating the smallest amount of regulations possible, what you call "liberal" would be considered "social-democratic" in Europe)
No British company ever went bankrupt because nobody wanted to by products produced with child labour; the overwhelming majority just didn't have a choice (guess what: their wages were just high enough to afford a living sometimes lower)
It was not until trade unions and leftist politicians fought for human rights higher wages, and yes, higher taxes that something like 20th century Britain could be achieved.
A country where "socialist tyrrany" made it possible even for the children of poor parents to go to university as long as they are smart enough.
The democratic countries of western Europe are those that have been best off throughout the last 50 years. Not despites; BECAUSE OF their "communist" policy.
Unfortunately some right-wing fools want to abolish our achievements...
p.s: you might excuse grammar mistakes or other inaccuracies as I am no native speaker of your beautiful language but only learned it in a tax funded European school

European "socialist" at 10:41 AM on January 11, 2011 | Permalink
I don't think your view of history is factually correct when you assert things like that trade unions caused higher wages.

England (and some other places) had fairly capitalist policies and the result was the "industrial revolution". This created more wealth which is what raised wages. Wages for a job go up when

A) There is high demand for employees -- competition among employers for workers

B) the opportunity cost of employing someone in that job goes up (i.e. the more productive some jobs are, the more you have to pay barbers or farmers b/c you are withholding them from those other jobs)

Both of these factors are caused by the accumulation of capital (so there are more people looking to hire workers, and so labor is more productive). The productivity of labor is directly related to the amount of capital that labor uses, so wages go up as the amount of capital (per person in the workforce) goes up.

As to child labor, people did that voluntarily. Why? Because the alternatives were worse. Subsistence farming with low technology really sucks and people chose dangerous factory jobs for themselves and their children because it was an improvement for them. I know it's awful by the modern standard of living, but at the time it was better otherwise people wouldn't have chosen it.

Capitalism is what created enough wealth that now children don't have to work in the "first world" countries (the ones that have had enough capitalism to get pretty rich).

BTW I definitely agree with you that capitalism is rightly called a liberal position, and America misuses the word.

Elliot at 11:54 AM on January 11, 2011 | Permalink

What do you think?

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