Government Steals Accomplishments of Capitalism

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Taxation is literally theft.

Most libertarians and conservatives understand this. It is theft because of the involuntary nature of taxation. Yet, governments steal much more than just your money. They steal all accomplishments from the market and then demand credit, not for their robbery but for their ingenuity.

Consider minimum wage laws, child labor laws, and the idea of taking the weekend off; the government claims that they are responsible for each of these benefits. But these benefits were only possible due to the accumulated wealth (i.e. capital goods) brought about by capitalism.

For example, the market usually pays more than minimum wage because business owners have previously invested in capital goods that make workers more productive, thus, more valuable.

Imagine being a janitor in a business without access to any capital goods (e.g. brooms, cleaning products, etc). Your marginal productivity would be so low that you wouldn’t get paid very well. In this scenario, a minimum wage would just eliminate your job from the labor market completely.

Yet, upon introducing capital goods such as brooms and cleaning products, you (the janitor) become much more productive. The more productive you are, the more valuable you are (i.e. the more profits you will bring to the business) and the better paid you will be. The minimum wage has done nothing to improve the prosperity of that janitor. Conversely, it would hurt the janitor if the minimum wage law was introduced before the capital goods. Instead of getting paid better, they would have been left unemployed.

The market is responsible for ending child labor, because of the wealth that has been previously created. Believe it or not, there was a time in America where children had to work to survive. In fact, many third world countries today suffer from the same problems. There is simply not enough wealth in the society to free the children from entering the workforce early.

Similar to the minimum wage laws, if child labor laws are introduced to these third world countries before the mass creation of wealth, the children will still have to work to survive; but instead of working in a factory, they will have to work on the streets as beggars or prostitutes.

However noble the intentions of the legislators mandating child labor laws, they directly hurt children where working is akin to their survival. Yet, you hear the government trying to take credit for ending child labor in America.

Only capitalism can do that.

The market even gave you the idea of taking the weekend off work, because humans enjoy leisure. As more wealth is created in the form of capital goods, human marginal productivity of labor rises. It now takes half the time to do a task than it did before the capital goods were created.

This extra wealth allows adults to have a break too, as they don’t have to work every day of the week to ensure their survival. Again, capitalism is to thank, not the government or the politically connected labor unions.

It makes sense that the market would be responsible for these shifts, it, by definition, must provide value. Conversely, it makes sense that the government would take credit for it; it helps them get reelected and grow their power.

After some examination however, it becomes evident that like all governments, ours is just stealing from private citizens, whilst blaming capitalism and taking credit.

* John Douglas has a fierce desire to change the world by spreading the messages of liberty. John provides keen insights on politics and economics through a libertarian lens based on his own personal experiences and attempts to provide logical solutions to some of our nations most enduring misconceptions. He blogs at http://gimmelibertyblog.com/ and http://www.actualanarchy.com/

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