praxeologist on Nostr: Statists claim "The government creates debt and outlines the path for development. If ...

Statists claim "The government creates debt and outlines the path for development. If the private sector follows this development path, much of the created money is absorbed through the resulting economic growth and the taxes generated from it, which helps control inflation. In essence, what can provide citizens with benefits beyond what the free market offers are the secondary advantages that arise when the government aggregates small revenues. This is something market advocates often overlook."

But an unanswered question remains: why is it only the government that can chart such a path? Are private investors too blind or incapable to recognize these opportunities themselves? This question can generally be raised about all government interventions that aim to achieve Pareto improvements. If the ultimate goal is to improve overall welfare, and this involves improving the situation for one group (Group A) at the expense of another (Group B) in the short term, why can’t Group A persuade Group B to voluntarily give up their short-term interests?

Interestingly, the market operates in the opposite way. The market forces investors to redirect capital from less productive sectors (in the long term) to more productive ones. In doing so, it achieves the very goal that government advocates argue for, but in a more efficient and non-coercive manner.

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