Saturday, November 24, 2007

Arguments for small Government

The Remittance Man has an interesting piece, AND TALKING OF INCOMPETENCE, in which he argues that Government is so big there just isn't enough talent to fill all the key roles such as Chancellor, Home Secretary and heads of Civil Service etc. Therefore we should reduce the size of Government. This is a well made case in a good cause, but it doesn't go far enough as it only considers one half of the equation.

I cannot argue with the need for talented people in those key jobs and that the numbers should be reduced to an absolute minimum but my argument is that this is because while they are consuming wealth they are not creating it. Surely we want our most talented people in industry creating wealth for the country?

This wealth creation argument is also the drive behind Lawson's dictum that taxes should be simple and universal. We don't want our best talent trying to minimise a Company's ever more difficult tax liability; we want them generating higher profits for their companies. On a personal level I resent having to pay an accountant to fill in my annual tax return even tough he generally save me money. He should be doing something more productive.

Consider the case of tax credits, probably the most fiendishly difficult tax relief system ever devised. In order to make it work we have some of our best computer programmers writing programmes and scripts so that people in call centres can deal with the ever growing problems. Surely raising the tax threshold would be the simplest way to give poor people a tax break? And then these creative programmers could be developing products that can be used to create wealth?

3 comments:

Mark Wadsworth said...

Agreed. If you take a pragmatic sensible view on things, you end up realising that the less government does, the better.

So a totla pragmatist ends up more or less agreeing with the libertarians, who seem to want to develop an underlying philosphy and work backwards to policies.

The Great Simpleton said...

Mark,

I haven't had the chance to study philosphy of even economics having left schoo at 15 so most of my philosphy is based on experiece and reading journals like The Economis. However I have now started to read up a bit more on Libertarianism and am probably in that school.

I am certainly see DK's post as a good starting point:

posted by Devil's Kitchen at 11/23/2007 03:48:00 AM

The philosophy of liberty

As a believer in free markets I see anything the Governement does should be tested against its ability to create wealth, or at least not consume it without good cause.

The Great Simpleton said...

Mark,

I haven't had the chance to study philosphy of even economics having left schoo at 15 so most of my philosphy is based on experiece and reading journals like The Economis. However I have now started to read up a bit more on Libertarianism and am probably in that school.

I am certainly see DK's post as a good starting point:

posted by Devil's Kitchen at 11/23/2007 03:48:00 AM

The philosophy of liberty

As a believer in free markets I see anything the Governement does should be tested against its ability to create wealth, or at least not consume it without good cause.