—-”Do governments create wealth and jobs for citizens?”—-*
First, let’s understand some terms to make sure we know what we’re talking about.
SERIES: *Defense > Rule > Government > Bureaucracy (monopoly) > Institutions (anonymous cooperation at scale) > Markets (speculation, investment, production, distribution, trade) > Norms (friction reduction) > Truth Telling (friction reduction) > Trust (risk taking) > Economic Velocity > Social Order.*
TERMS
**- Defense** (*producing a territorial monopoly on the organization of decidability over uses of assets (property)*),
**- Rule** (*dispute resolution, or resolution of differences*),
**- Government** (*the production and management of commons*), and;
**- Bureaucracy** (*a monopoly that manages daily operations*) are four different things.
DEFINITIONS:
**Defense** secures territory from appropriation by other large organizations capable of physical appropriation. Defense produces possibility of choice of **SOCIAL ORDER** (portfolio of property, norms, traditions, laws, legislation, regulation, institutions)
**Rule** resolves disputes between people given the property allocations (in china, none, in russia, some, in europe some more, in america most.) In most cases norms are produced by the consequences of rulings by kings, judges, priests, and ‘authorities’. This is why laws vary: they must reflect the needs of the current stage of development of the people in the polity. Adjudications of differences produce **LAW**.
**Government** produces commons through charging and maximizing fees (taxes) of members, and directing those fees to the production of commons, that they assume will produce multipliers (greater returns than private sector will) for the simple reason that some commons are extremely expensive. Legislation(contract) or Command(Dictate) produces **LAW SUBSTITUTES** we call Law but are not. This ‘conflation’ is endemic in discourse.
**Bureaucracy** does labor that a market cannot yet perform through competition. In theory, a bureaucracy functions as portfolio (financial) manager of a function that the market cannot yet produce, or produce in sufficient quantity, or produce at a sufficient price. But like all monopolies they pursue self interest and always become corrupt. In a perfect world, states would start multiple competing bureaucracies like startups, and the best one or two would survive.
**WHAT GOVERNMENTS DO**
Governments create the possibility to organize increasingly complex markets with increasingly complex divisions of labor, with increasingly complex concentrations of capital, with increasingly complex abilities to adapt to shifts, changes, and shocks.
Governments do this by prohibiting rent seeking, corruption, parasitism, theft, murder at the local level, and capturing the gains as taxation, which they then use to pay for the production of commons, that in turn produce multipliers (returns), that in turn increase standards of living – or governments fail to do so, by not suppressing corruption and not producing commons, and not producing multipliers.
So governments create the possibility of increasingly productive and rewarding polities. But it is the entire network of people from the monarchy (Rulers) to the peasantry (laborers) that create jobs through constant increases in the velocity of production.
Why? Because our only wealth is time. We are not wealthier than cave men. We simply make everything cheaper by taking less time with more hands in greater coordination to produce everything we desire for less and less of our time.
Rules make a game. Governments make rules so that we can play economic games – and moreover that we cannot play anti-economic gains.
Curt Doolittle
The Propertarian Institute