Is Government Productive?

Some people will argue that just because the government does something, anything, that it’s being productive. But whether someone, an organization or government is productive or not depends on the value of what is done and the costs to do it. If the costs are greater than the value then it’s consumption. Productivity means taking resources and putting them together in such a way so as to create something new with a greater value than the sum of the resources individually.

My grandmother’s arts and crafts club used to take penny pipe cleaners and twist them together to make Christmas tree ornaments. They sold them for a nickel creating three cents of value for each one since the pipe cleaners alone were only worth two cents.

As an employee, your employer gives you resources to work with and you produce what he decides would add the most value to the company and he shares that productivity with you in the form of a paycheck.

Your lawn is overgrown and needs to be cut so you take your lawn mower and time and energy and mow the lawn. You value the freshly cut lawn more than when it was overgrown so you were productive.  

Is there any evidence, any argument that government can be productive? That they can do something, anything that has more social, economic value than the resources they use would have individually? How do you measure social, economic value in a country of 320 million? Ask every single person and then take an average? Estimate it based on random samples? Even if you could, everyone is an individual with individual preferences and values. The concept of public utility or social value is just an idea, an abstraction used to simplify and obfuscate economic parameters on a large scale. It doesn’t exist in reality and cannot be measured in any meaningful way.

Where does a government get the resources it uses? Taxation, fees, fines, permits, licensing any number of revenue generation schemes that people in society are obligated to pay or face penalties up to and including jail. They also confiscate land and natural resources under the guise of law. All resources the government has were taken from someone else. What are the costs to society, the economy? Resources taken from one sector of the economy and redistributed to the government can no longer be used for productive activities in the sector they were taken from. This is called opportunity cost and it’s immeasurable. Although the government might do something with those resources, there’s no guarantee it will benefit the sector they were taken from more than those resources could have benefited that sector directly.

Resources are used most efficiently by those who own them because there was a cost to acquire them. When government takes resources, they have no incentive to use them efficiently because it didn’t cost them anything to acquire them. They know that regardless what they do with those resources, they can always take more. Government waste is well known and documented. Wasting resources is consumption, the opposite of productive.

The government has a $32 trillion debt from borrowing to cover operating costs. That debt imposes an inflation tax on the entire economy leaving less wealth for private innovation, invention and productivity.

By its nature, the state is a consumer of resources, not a producer of wealth. Although all of these costs cannot actually be measured, there is no evidence that anything the government does could produce more value than it consumes.

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