On The State... And The "Stimulus"

As we witness the profoundly “anti-capitalist” activities of the US Fed we are forced to reconsider the Marxist view that The State in a capitalist society like the US is but a “committee of directors” of Capitalism.

Nonsense!

All The States of the World are essentially anti-capitalist. This is because anyone who works for The State lives off the taxes forcibly coerced from all those who engage in capitalist voluntary exchanges.

I gained this profound insight after reading Murray Rothbard’s essay entitled “Anatomy of The State” first thing this morning – thanks to Chandra.

(After a “decent smoke” of course!)

Lady Luck smiled and LRC informed me that marijuana smoking prevents Alzheimer’s Disease. The Holy Smoke is Good for Old People. Thank heaven’s I started young – in December 1973, to be precise.

Getting back to Rothbard and getting serious once again:

He says:

“The increasing use of scientific jargon has permitted the State's intellectuals to weave obscurantist apologia for State rule that would have only met with derision by the populace of a simpler age. A robber who justified his theft by saying that he really helped his victims, by his spending giving a boost to retail trade, would find few converts; but when this theory is clothed in Keynesian equations and impressive references to the "multiplier effect," it unfortunately carries more conviction. And so the assault on common sense proceeds, each age performing the task in its own ways.”

The very idea of a “stimulus” is a revolt against common sense.

It is also deeply anti-capitalist.

That is their The State – Uncle Sam.

Now let us look at our The State – Chacha Manmohan Gandhi, and his idea of boosting government spending in order to provide a “stimulus” to the market catallaxy.

This is also a revolt against common sense – and intensely “anti-capitalist” as well.

Lucky for us that we have Kaushik Das arguing in Mint today AGAINST the idea of a government spending “stimulus.”

He concludes:

“As savings fall and private investment adjusts downward, the overall growth of the economy is likely to be hit substantially in FY10. In all likelihood, real GDP growth in FY10 is expected to fall at least 1 percentage point below the average trend growth of 7% recorded between FY99 and FY08. One possible way to counteract this negative effect is to cut corporate as well as income taxes and also aggressively cut wasteful government expenditure (instead of a fiscal boost, as discussed in the recent Group of Twenty summit) in order to prop up private savings and investment. This can also have an indirect positive impact of boosting the image of India as a reform-friendly country and help to encourage foreign capital flows back into the country. Failing to do so will lead to the inevitable severe growth slowdown in FY10 that economists and policymakers are currently losing sleep over.”

Wonder why Kaushik did not also suggest wholesale privatization of the public industrial sector?

Sherlock Holmes would have called this a “three pipe problem.”

Think!