The Role of Government—to Protect, not to Divide

Government Control

Whenever Government interferes with or extends control over private enterprise or the Free Market System, four things will happen:

1. Productivity will go down.
2. Prices will go up.
3. The quality of products and services will decrease.
4. The availability of products and services will decrease.

In short, the customer will get less, but it will cost him more.

The only solution is to get Government off the back of free enterprise and let the latter operate in its natural environment, without restraint, serving the needs of the people.

The Nature of Government 

Government is, by its very nature, parasitic.

It must feed off the productiveness of its citizens the citizens it is supposed to represent, in order to exist, taking a percentage of this productivity before it can do anything. And it follows naturally that the more Government does, the greater the percentage of what it must take from its citizens’ earnings. The smaller the government, the less it has to take from the people; the bigger the government, the more it must take away from its citizens.

How big should Federal Government be?

The answer is really quite simple. The only legitimate functions of Federal Government are:

1. To provide the national defense.
2. To maintain the system of law prescribed by the Constitution.

That’s all.

The proper role of Government is to protect, not provide.

Government Money

There is no such thing as “federal money.”

The only money the Federal Government has it must first take away from the people who earned it — in the form of taxes.

The Government produces nothing; it is never a source of goods. Only the people produce goods and services.

Any government can take only from those who produce… and then give it to those who do not — a distribution of wealth system that, coincidentally, loses a lot of money through administrative expense in the process.

The “redistribution of wealth’ is a Socialist concept (in fact, it is the primary plank of the Communist platform), and if allowed to continue will gradually undermine and eventually destroy a productive and profitable free enterprise system, the capability of a nation to sustain itself, and the freedoms of the citizens of that nation.

“TANSTAAFL”

Whenever people vote for and elect those politicians who promise them free largesse from Government, they are, albeit unwittingly, voting themselves into eventual slavery to that government. Whether it be some type of welfare program, price support, industry subsidy (or anything they have not earned for themselves), when they receive this largesse — in any form — they must also be prepared to accept the following with it:

• Increased government control over their private and business lives (when Government gives anything, it also sets the terms under which it can be received).

• Increased cost of consumer products and services (taxes must be raised by Government to pay for any largesse, and consumer prices must consequently be raised to pay the taxes levied).

• Loss of individual and collective freedoms (the governmental bureaus created to dispense the largesse will always enact new and more restrictive regulations and rules).

It’s quite true: “There Ain’t No Such Thing as a Free Lunch.”

Capitalism

Capitalism is a key ingredient of what made our nation so successful during the relatively short (historically speaking) period of 200 years. Everyone thinks he knows what capitalism is, or at least has an idea of how to define the term; but let’s take a look at what some of the great economists, philosophers, and historians had to say about it:

• “Capitalism is a system which channels human greed into the maximum benefit for everybody — not a system which makes fat cats fatter,” said Adam Smith (1723-1790), the pioneer Scottish economist and author whose Wealth of Nations provided the base for modern-day free market economics.

• “The beauty of the free enterprise system is not that it makes entrepreneurs more moral— it doesn’t — but that it creates wealth while protecting the consumer,” says Dr. Petr Beckman, who published the excellent Access to Energy newsletter.

• “And as for socialism, which is the antithesis of capitalism: The best way to make everyone poor is to insist on equality’ of wealth.” Who said it? Napoleon Bonaparte, in 1817.

• And modern academician Professor Kenneth Minogue has this to say: “Capitalism is what people do if you leave them alone.”

• And here are some thoughts from Dr. Clarence Carson, a leading economist, historian, and author of a five-volume set of books that constitute the best (and most accurate) history of America available: “Prosperity is based ultimately on the production of goods, not their consumption. Wealth is a result of production. Prosperity based on anything other than production and exchange with others of what we have produced is a delusion.”

• And as a final quote, heed this one from author Robert W. Lee, who publishes the informative Comments & Corrections newsletter: “The freedom of individuals and the economic growth of societies are inversely related to the quantity of government with which nations are afflicted.”

The Laws of Economics

Economics is by no means an exact science, but literally centuries of observation and experience have produced some generalized axioms that hold true and thus have become known as “The Laws of Economics.”

• Gresham’s Law — Bad money drives out good. (For example, debasing the metal content of a gold coin reduces its intrinsic value, since the real gold coins will be hoarded, or melted down to buy a greater number of the debased coins.

• Law of Diminishing Returns — If any one factor of production is continually increased while other factors remain constant, eventually unit of increase brings a smaller addition to production than the preceding one. Eventually the single increase brings no return, or a negative return (it will cost more than it brings in). Also known as the “Law of Variable Proportions.”

• Parkinson’s Law — Work expands to fill the time available to do it. (Or, the amount of work done varies inversely to the number of people employed to do it.)

• Iron Law of Wages — If wages rise above subsistence level, they produce a rising birthrate and population, which in turn force wages down again. (Good times will result in more people to do the work — the available supply will surpass the demand.)

• Say’s Law — Every rise in the supply of goods produces an increase in demand for them. (True of barter economics.)

• Law of Supply and Demand — Competition between producers and consumers brings the supply of goods and the demand for them into balance. (Overproduction will lower prices increasing the demand; overconsumption increases prices, decreasing the demand.)

• Peter Principle — In any organization, every employee rises to his or her level of incompetence. (All valuable work is therefore done by people who have not yet reached that level. For example, a good salesman promoted to sales man — he might turn out to be a total bust — he might have excellent sales techniques but no management abilities.) [Editor’s note: some experts do not consider this a valid law as stated. “Every employee” does not take into account that individuals may know their own gifts and limitations, and therefore refuse promotion. Also, per Inc.com, “The general assumption is that management requires a higher level of competence than line employees. In reality, it requires a different competence than an individual contributor role.” (Read more.)]

These, then, are the Economic Axioms or Laws of Economics as I have distilled them over a life-time of analysis and research. As you see, they are simple, basic, commonsense and easy to understand. It is America’s misfortune that demagogues, bureaucrats and special interest groups break these immutable laws and so often. [Thus, leading to skewing economic results and damaging prosperity. — ed.]

The original of this article appeared as a pamphlet published by Americanism Educational League, Freedom Center, Buena Park California. Though no longer in existence as an organization, NPI publisher Gerald Christian Nordskog served as a board member of the organization.