This time, Duly Noted places the economic role of the state in it into its focal point. This warrants an affirmation of the writer’s own position. The state is not a necessarily a negative force with regard to the economy or basic freedoms. Admittedly, modern dictatorship can only unfold once its operators grab control of national states and economies. Equally true is that democracy presupposes a properly regulated state. The issue then is the limit imposed upon state power and the scope of its activities in areas in which its role can be constructive. Essentially then, the dispute with the Statist is about the exact role to be assigned to the state and the extent of the power that should be delegated to it. Therefore, the negative references to the “state” do not stem from a fundamental opposition to it. The reservations merely reflect the dangers inherent in an excessive role of the state. This comes about when that role is paired with the ability of special interest groups to kidnap the state to serve their interests.

 
1. The story behind new taxes is rich in lessons. However, through the repetition of the cases, the plot can become rather monotonous to the attentive. Even so, the repetition might be necessary because those in need of instruction resist the lesson of the story.

It all begins with stage one. That is when the measure is proposed. At that point, the public is told that the planned tax is to be temporary and slight. Most importantly, the advocates soothingly allege that the costs will hit others but not you.

Once enacted, we proceed to stage two. This is the phase when the burden becomes permanent. Like St. Bernhard puppies, it will grow as time passes. Most importantly, in faze three –too late folks!- you will discover that, after all, you were wrong about the “you”. Another “you” must have been meant when your immunity had been promised.  Surprisingly, the “you” you happen to be is the one who has to pay. Directly or indirectly.

2. Depending on the validity of a soft-pedaled pre-condition, there is a good theoretical argument for redistributing individual wealth. The requirement demanded is that the advocates of the approach prove that the fortune to be reallocated is a product of the community and not a recognition of the economic merits of successful individuals. Indeed, and this includes the skeptics, wealth is created in the context of a well-regulated community. Unquestionably, an umbilical cord connects “order” and general material advancement. Meanwhile, the actual wealth in the hands of persons is created by the effort of individuals. It is made possible by the public that voted with its purchasing power to reward that endeavor.

3. It is easy, perhaps even natural, to be against profits when one is a direct or indirect employee of the state. Those working within normal economic entities depend on contributing to the gains of “their” organization if they wish to protect their careers, livelihood and fortune. Pursuing profits through an engagement that matches the public’s demands with the interests of the entrepreneur, is the purpose of private sector organizations and their employees. This makes the parties’ profit mutual. The personnel of the increasingly expanding public sector do not live off “dirty” profits. They depend on taxes that, therefore, they will hardly ever regard as “bad” or even as sufficiently questionable to warrant their re-examination. This difference explains why bureaucracies are for more taxes while they crave their expansion. It also tells why they oppose and castigate those that plead for the reduction of the tax burden.

4. We increasingly encounter deficit-causing government activities. The remedies available not only contradict each other but they also represent logical opposites. The rising costs of the operation of public administration can be covered by raising government revenue. Government can and will therefore want to raise taxes. The revenue government can create differs from that of enterprises. Through their offerings, these must entice, in the context of competing offers, the public to support them with their outlays. Government can increase its income by augmenting its takings through ordinances that create new taxes. The disliked alternative is to swim back from the red sea to black waters by reducing government consumption.

The procedure is a challenging one. Cut spending implies reduced allocations to organized interest groups. The support of these at the next threatening election could be crucial for the survival of the ruling section of the elite.

5. What we pretend to have learned from the still ongoing economic crisis is that altered regulations and comportment is necessary. What we notice as we discuss the ways of implementing reforms is that vested interests can move masses more than reason. The crowd is deluded by past bribes fed to them by those rulers they had elected in the hope of receiving favors. Any meaningful change to reduce expenditures and to create flexibility on the labor market while stimulating domestic competition is likely to provoke mass disobedience. “Greece” refers to an entire category of past, current and notable future specifics. Therefore, the politically inspired changes that are proposed concentrate on doing more of what has caused our hither troubles. More regulations, more welfare and more investment-killing taxes are on the menu. The desert comes topped by senseless restrictions on the activities of banks in the hope of creating the needed social consensus.

6. About how we pretend to cope with our self-induced predicament. The defiant slogan of the RX is “less state”. The practice: more government. The threatening result: more unfreedom.

7. Some trends are working in favor of statism and the groupings that are able to use the state’s institutions as their fiefdom. A symptom of the force behind the inclination is the hope that the directors of state power have the means and the insights to solve individual problems. A related assumption is that the state can act as an honest broker. In doing that, it will be tempted to engage itself in favor of its supporters. Therefore, this will be to the disadvantage of the competitors of these supporting interests. As a result the honest broker of theory will wind up in practice as an agent.

Besides increasing the power of the state, these inclinations and expectations also entail dangers. The “coming” phase of the economic crisis that has already humiliated the real-estate industry, then banks and ultimately shook enterprises, is about to strike the state. The loudening talk about shaky sovereign debt is more than a speculation about a remote possibility. Failing economically will demonstrate the limited powers of the state in all areas where it plays the role of the princess that through kissing princes creates frogs. The process will involve high interest rates following upon today’s low-interest state-backed securities.  Through the resulting scarcity of cagey investment funds, the consequences for employment will be severe. On the positive side, the discredit of state economy will mean that contemporary skeptics will turn to civil society for self-healing remedies.

8. Some organizations have the ear of politics and can suggest reforms that might be, in reality, laws to their advantage. Such organizations have an interest in the resulting redistribution as it is in their favor. The hidden concern, even if sold as such, is not general welfare.

9. Those disappointed by the political process might opt to abstain from politics. That decision leaves public affairs to be dominated by the favored beneficiaries of allegedly impartial state action.