Day 81: The Role of Government in the Economy

In one of the previous blogs, we explained how there's different degrees of government involvement in different economies.

The information within this blog will specifically relate to the role of government within the context of a free market system approach.

Supporters of the free market system see the private sector as way more efficient than the public sector/government because of its 'competitive nature'. So keep this in mind when reading the blog.

The role of the government within the economy is considered within four points:

1. The first point is that the government should not get involved in the production of good and services lol.
2. The market system / economy does however need the government in terms of providing a form of stability and certainty through laws, rules, regulation, monitoring and enforcement. These points need to be in place for firms and consumers to make contracts. Also think about for instance property and copyright laws.
3.  Markets do not always produce efficient outcomes, and sometimes the government requires to intervene to 'correct' the market failure (think Bailouts)

4.  It's generally acknowledged that markets produce relatively efficient outcomes but not equitable ones. So when society wants a higher level of equity as for instance in the form of a more equitable distribution of income -- then this requires government intervention. This is seen as a controversial topic within economics as our system is designed in a way where there is mostly always a trade-off between efficiency and equity

There are generally five ways in which the government can intervene within the economy:

1. A first way is through public provision of goods and services such as infrastructure and 'national defence'. This is done through either public ownership or by public financing within the production processes of the private sector (eg subsidies). In recent years it also has become more popular for the government to hire the private sector for the provision of public goods.

2. Another way in which the government can intervene is within its position as a market participant. The government is the largest employer of labour within the economy and as such it can through for instance its wage policies and other practices achieve certain objectives.

3. The government can also influence the economy through its expenditure/spending. Besides influencing the economy through its spending patterns of goods and services, it can also engage in something called 'transfer payments' -- these are basically payments where the government doesn't receive anything in return. Examples are subsidies, child support grants, disability grants

4. Another method is through taxation. Although taxations' primary purpose is that of government income, it can also be used to manipulate the economy (eg sin taxes on tobacco, alcohol or lower tax rates for smaller businesses). In those cases taxes function as incentives.

5. As mentioned before, the government is important to the economy for a rule of law point of view. Through laws and regulations the government can also impact the economy. Here consider minimum wages, anti-tobacco laws, minimum prices, etc.)

Day 56: Measuring the Performance of the Economy – Part 2

I forgive myself that I have accepted and allowed myself to value objectives within macroeconomics in terms of evaluating the performance of the economy – which is no way are related to the wellbeing of Life on Earth, but only concerned with the self-preservation of the current economic system

I forgive myself that I have accepted and allowed myself to have created a world economic system where Life on Earth is placed in the service of the Economic Machine of Greed and Unsustainability – instead of a world economic system which serves Life on Earth

I forgive myself that I have accepted and allowed myself to have completely missed the point of economics – where I accepted and allowed myself to believe in - and support a system of Hope where few win and the majority lose, where Hope is the only thing keeping the system standing as the majority hope to one day be in a position of the few – while obviously this is not mathematically possible, as the lifestyle of the few is only possible if they remain few – and within that I forgive myself that I haven’t accepted and allowed myself to have created and economic system which actually looks at all the points in the world which require support within sustenance and then unconditionally direct the flow of resources towards all points which require sustenance/support without any form of discrimination which is in fact what the Equal Money System is designed to do

I forgive myself that I have accepted and allowed myself to value ‘economic growth’ as a macroeconomic objective, and where this objective is valued above all other objectives as the Holy Grail of Success – without seeing and realising that the desire for economic growth is just another way of saying ‘more..More.. MORE, I WANT MORE!!!’, as a spoilt child throwing a tantrum for not getting what it wants – while in the meantime half the world perishes in poverty and starvation and get to be ignored while we economists stare at economic growth like a moth being attracted to a flame - ever hypnotised, never considering the consequences of one’s actions

I forgive myself that I have accepted and allowed myself to value “how much more stuff has been produced” as the primary marcoeconomic objective

I forgive myself that I haven’t accepted and allowed myself to see and realise that the news today which I can see/hear/read about daily – clearly indicate that there are much more important objectives to consider as the suffering and madness is undeniable, yet I will value ‘producing stuff’ more over ‘making sure everyone’s living a comfortable life’

I forgive myself that I have accepted and allowed myself to have mindfucked myself into believing that ‘producing stuff’ equals ‘making a better world’

I forgive myself that I have accepted and allowed myself to justify within myself my evil actions of limited self-interest with the thought that ‘eventually all the stuff/wealth will trickle down to the poor and then they will also be better off!’

I forgive myself that I haven’t accepted and allowed myself to be honest with myself as I know that ‘it will trickle down to the less fortunate’ is a big fat lie – but as long as there are enough of us portraying it to be the truth and teaching it to our children, we can maintain the lie and keep avoiding self-responsibility – and if we put it into pretty sophisticated words in textbooks then it almost sounds true too!

I forgive myself that I have accepted and allowed myself to have created a world economic system where there can never be full employment – and then at the same time create the system in such a way that everyone is dependent on employment to earn their living, and so not everyone can live

I forgive myself that I haven’t accepted and allowed myself to see and realise that we can just as easily create a system where people don’t have to depend on employment to be able to sustain themselves and where we scale down our industries of entertainment which are only here to benefit the minority – so that there are less jobs to be done and so not everyone has to work all the time for the sake of profit and economic growth – and so we will have more time available to actually live and enjoy ourselves

I forgive myself that I have accepted and allowed myself to value only those things which relate to the preservation of the current economic system – and so there are no real goals , as all we are doing is timelooping on the same point, which is our current economic system which is Not Best for All

I forgive myself that I have accepted and allowed myself to place ‘equitable distribution of income’ as one of the objectives of marcoeconomics, but it is really just to appease people, where we pretend that we are giving inequality attention – while we don’t, and then justify our non-consideration on the base that it is a ‘normative’/’subjective’ issue – and that it is not the economist’s place to say anything about this issue, as they are not politicians or sociologists – which is a real easy way out of not taking responsibility – and within that I forgive myself that I haven’t accepted and allowed myself to see and realise that our very economic system as what it currently exists as, is ONLY based on the subjectiveness and normativity – as it is a VALUE SYSTEM which currently only values the HAPPINESS OF A FEW – and so when economists say that they rather do not comment on such a ‘controversial issue’ as ‘unequal income distribution’ – it’s really just the same as saying I LIKE THIS INEQUALITY JUST THE WAY IT IS

I forgive myself that I haven’t accepted and allowed myself to see and realise that it is not about being a ‘politician’ or a ‘sociologist’ or whatever other qualification – as the only thing you require to comment on the current status of inequality within the world is YOU as a HUMAN BEING and the realisation that OTHER HUMAN BEINGS, which are JUST LIKE YOU, are mostly in positions which you would NOT WANT to be in – and within that you either decide to DO SOMETHING ABOUT IT or NOT – and as we have seen, the mainstream economists have decided to NOT do ANYTHING about it as they value their own Life as more valuable than others