The narrative on government is in dire need of reform. Government is necessary for a modern functional society. It is not bad or evil. Not all government employees are lazy or overpaid or stupid. There are lazy employees everywhere because there are just lazy people. And there are ambitious, competent people in all sectors too. Government is not a waste of money or stealing from taxpayers. This is an idea that has been propagated by the donor class to move society from a rule of the majority to serving the billionaire classes only.
Good institutions, including government, are needed to facilitate our modern society. Because of rhetoric of the past 40 years or so, government has been denigrated to the point of no longer being supported by people it serves. We have been convinced that taxes are bad no matter what. If something doesn’t directly supports us then we don’t want to pay for it, including infrastructure and education. But that isn’t how taxation works in the macro. We collectively pool our resources to provide for things that we desire as a civil society or that aren’t provided for adequately by the private sector, such as healthcare, education, infrastructure such as roads, bridges, sewer, water treatment, etc. These things provide benefits to society beyond the direct impacts to the “consumer” of them. Infrastructure, education and healthcare are vital for economic development and raising the living standards of all.
Government is a key component for innovation. This idea doesn’t get much “air time”. A great example is technology that is found in the smartphone that you might be using to read this blog post. GPS, Siri, the internet and touchscreen technology were all founded in a government funded program like DARPA or through an NSF grant. The fact is the private sector is great at adopting (and improving) technology once it reaches a certain level of development. The private sector rarely has the appetite for unproven technology that is developed through basic research. Venture capital doesn’t want to fund the very early stages of innovation and requires a very quick turnaround of it’s investment. Government often provides the seed funding for early development but rarely recoups the investment. The private sector receives all the benefits of this public investment but never returns the proceeds from what they often receive for free or very cheaply. (For a detailed account of this see Mazzucato, The Entrepreneurial State, 2015). This is problematic because as government funding for this research and these agencies has been decreasing steadily because no one wants to pay taxes. This puts the United States at a serious disadvantage compared to other countries that are increasing their investment in technology such as China.
It is telling that the happiest countries on the planet are also the ones with strong governments funded by the populous through taxation that provide solid safety nets. The United States has the largest economy as measured by Gross Domestic Product but is ranked 19th in the 2019 World Happiness Report (https://s3.amazonaws.com/happiness-report/2019/WHR19.pdf). Income per capital does contribute to happiness but isn’t enough alone to buy happiness. Governments play a key role in a society’s overall well-being. Happiness is influenced by a feeling of safety, personal freedom, work-life balance, life expectancy, and having a representative government. Any increases from rising incomes in the United States were offset by worsening health outcomes, divisive political environment, declining social trust, and feeling unsafe given the now regularly occurring mass shootings. The declining social trust can clearly be seen all over social media. The government in Finland recognizes this issue and is actively fighting the misinformation through an multi-pronged initiative including increasing critical thinking skills to educate it’s population to recognize and counter fake news and other misinformation that can sow division.
I firmly believe that we have the power to reclaim our democracy from the influences that are degrading our happiness and social environment. But it is going to take work and a lot of work. We need to change the narrative that government and taxes are bad or evil or theft. They are not. We need to recover our government from corporate influences. We need to create a system of fair taxation where billionaires don’t pay less tax than a secretary. We need to fund adequately our educational systems and teach critical thinking skills to help us navigate the complex digital environments of today and tomorrow. We need to support government investment to continue innovating.
Government is required to provide for property rights, resolve disputes, correct market failures and provide things the private sector will not or not in adequate amounts. Government should also be accountable to those that it serves and that includes all of the populous, not just the propertied or wealthy. Government should also be as efficient as possible but with the realization that it holds a different role than the private sector. We need to realize that government is necessary and we need to sufficiently fund it to help create a society that supports all of it’s citizens.
mad political economist 