The Detrimental Relationship Between The State and Economy

December 24, 2014 Updated: April 23, 2016

How often have you seen the all famous capitalist pyramid where all the workers hold up the higher classes unto a large pedestal, with the almighty bag of money at the top. Consider the actual implications of this, and wonder if it is really true? Are all of those workers truly holding up the world? Or is it the men whose minds and ideas give the workers the possibility to work, and in fact give them their livelihoods?

In every instance throughout history there have always been men of great reason, driven by profit, that have created the wealth of the world in which the working class has taken part in. Have you ever considered the alternative? What if industrialization never had occurred, and the workers were forced to continue their existence in the banality of a rural setting. Who raised their standards of living? In 19th century Britain, sure the city was a shabby and dirty place, but was it not much cleaner than living in the mud in the countryside?

Yet the men who hold the world up are being continually attacked and regulated by government, which in turn has a perilous effect on the rest of society. When the ability of those that are capable to create wealth and profit for themselves by producing is heavily regulated and inhibited then all of our lives are also adversely affected. Now, you might ask how could someone not making even more money than they already have could affect the rest of us: the answer is simple.

The corporate tax system where a business is taxed heavily plays a substantial role in the readjustment of prices which in turn leads to inflation, meaning that the money that people earn becomes less valuable. The buying power, affected by rising costs, will affect people and their livelihoods. This of course as we know is accompanied by fair share, and fair-competition laws, such as the infamous Sherman act, which led price fixing, to a lack of competition leading to price increases. Whenever a state taxes a business, it isn’t just the business that is affected, but you and I. Why do you think everything is so expensive in heavily regulated nations such as Denmark, and Canada?

Consider the issue of minimum wage. The wage is fixed accordingly, not to ability, but to the needs of those who receive them. The higher it is set, businesses are forced to increase their prices, which in turn will lead to inflation and the devaluation of currency. Thus, again money will devalue substantially, and the initial wage increase would become meaningless. 

When fair competition is enforced, through fair share laws, and production quotas on the highest producer, or when copyright patents are enforced by the state, or are made public by force, is when prices tend to rise, as competition becomes equalized, which in turn may lead to products which are of inferior quality. Who then is affected if not the consumers, the workers whose livelihoods depend on the food they buy, and the products that are necessary to live?

Friedman would agree that there is no such thing as a monopoly in a truly laissez faire system, where government would never play a role to grant favors to corporations in various measures in order to ensure a monopoly over a certain market. This is, as some would refer to it, economics by influence-one where the powers of government are used by individuals for their own selfish gain at the expense of others, and not selfishness through proper voluntary trade as is most characteristic of a civilized nation state.

There is a sinister mysticism behind the belief that somehow the government plays an important role in keeping the economy of a nation state healthy by implementing heavy regulation on its business. Nothing could be farther from the truth. Historically, whenever the government has stepped in to regulate a section of the economy there has been only devastation, and egregious despotism.

Free enterprise has proved time and time again to be the only means by which liberty, equality and generally greater prosperity have prevailed. Every example where the opposite also known statism, under the guise of fascist or communist ideologies took over has proven to end in bloodshed, desperation and utter evil.

Imagine a social system of 10 individuals is formed, and 1 man comes up with the idea, technology, and resources to create a certain type of crop which would feed all ten men at the cost of a few tradeables. The nine men who have not created anything inherently benefit from the food produced by the 1 man, yet they believe that the price should be even lower, thus they form a consensus and tax the 1 man, yet as a result this leads to more tradables being needed to cover the costs for the crop to be produced. By forcing the 1 man to pay more taxes on his product, they inherently force themselves to pay even more tradeables for the food that they need. A relationship based on slavery, where they claim that their needs are the only important factors, and not the one man’s rights.

When state and economics become intermingled a ghastly situation occurs, where the unearned begin to claim their needs must be satisfied by those who have earned. In such a system, these people use the state and its coercive arm to force businesses, and individuals to pay taxes for the benefit of others. To produce less, for the benefit of others. To increase production costs, for the benefit of others. What could be more morally outrageous?