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Cowen’s “Package Deal”

Excellent, provocative piece by Professor Tyler Cowen over at Cato Unbound. He writes:

“Those developments have brought us much greater wealth and much greater liberty, at least in the positive sense of greater life opportunities. They’ve also brought much bigger government. The more wealth we have, the more government we can afford. Furthermore, the better government operates, the more government people will demand. That is the fundamental paradox of libertarianism. Many initial victories bring later defeats.”

He calls this tendency for more wealth leading to more government a “package deal.” That’s a most excellent insight. With more wealth, the relative cost of government is reduced. And, with a bottomless pit of human wants and needs, the tendency is for government to grow along with national wealth.

I do believe it is possible, though unlikely, to decouple economic and government growth. It would involve cutting taxes from the bottom up, where the need for tax relief is highest. And, at the same time, cutting spending on domestic, discretionary spending, where the benefits are least concentrated and least numerous. Can you envision a march on Washington over a 5% cut in the Department of Commerce?

Still, Cowen’s point about focusing on liberty and not as much on regulation inserts a dynamic into the calculation that is long overdue.

-Robert Capozzi

Posted by Robert Capozzi on March 15, 2007 03:53 PM |

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