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| Julian Laws |
A cursory study of microeconomics reveals some human behavioral patterns that would suggest a limited government better serves the population, especially at the federal level. When understood, the general populace of a country would want to keep as much of the decision making as close to home as possible. I mean this both figuratively and literally. Major decisions in policy should be made where it affects individuals the most: in their towns and communities. This would inspire the populace to take more of an interest in community affairs, cast more informed votes and increase the effectiveness of personal outreach. In the most literal of senses, keeping the decisions close to home means making families the primary decision makers for what is best for them.
Mutual Benefit and Incentives
The first behavior is based on the idea of mutual benefit and incentives. Commerce functions on individuals and service/product providers making agreements on trade that gives each party the maximum benefit. If you’ve ever haggled with a vender at the local farmers market you’ve experienced this first hand. Otherwise, individuals shop according to the return the product or service would give in exchange for the amount of money or labor they are willing to sacrifice for it. If the price is too high they look for an alternative or go without. This transaction creates the most efficient allocation of labor and resources.
As more product and service industries are monitored, regulated and controlled by government the more the efficiency between coming to a mutually beneficial result is hindered. Simply put, some people begin to pay more, in both labor and money for less while others pay less, in labor and money, yet receive more. Adding an administrative third party creates a drain on money and labor. Such organizations are then funded through taxes since no product or service is provided; adding to the “more” that people must pay for the decrease in their return. This de-motivates producers and enables non-contribution.
Human nature is geared to responding to incentives. The best possible situation is created when everyone contributes to the highest possible mutually beneficial point in a trade either through labor or resources. Government intervention disrupts this exchange and falsifies the consequences of contribution to trade. Paying more for less, leaves producers with little or no incentive to continue production at the same rate. Paying less for more, leaves consumers with little or no incentive to contribute with labor or resources. Maintaining the incentive to contribute is paramount to creating prosperity for both parties otherwise there is a net loss in wealth and society as a whole is poorer. Read rest of column here: News New Mexico
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