I wish you would of included autos as a sector that needed to reallocate.
 

That's a great interview -- keep explaining things in clear, simple, grounded logic and maybe we can get more people to see things for how they are!
 

Gary Johnson's platform sounds like the best, credible all-round-libertarian platform you can find. And he was a successful governor, not just a Dr No lone Congressman
 

Cheapshot.
 

One thing that continually intrigues me about the "The government doesn't create resources" line is that it seems conspicuously out of place in a paradigm which is built around the subjectivity of value. It's true that the government doesn't create material goods, but of course that's not what resources are. If value is importantly subjective, and if governments can do things like overcome local transaction costs, disseminate information, and identify Schelling points, then it would seem that governments can create resources, as well as enhancing the value of existing resources.

Of course, that's not an argument that they do do that -- in all likelihood they have a negative net effect. But insofar as they fail, it's not simply because they are only "moving resources around"; rather it's because they're hampered by knowledge problems, perverse incentives, and the bluntness of the tools available to them (along, I'm sure, with other influences). That seems importantly different from the view that's captured in Felix Morley's statement that "in worship of the state, men sacrifice their souls to a false god that can give them in return only what has already been placed by the worshipers themselves on this sacrilegious altar."
 

Something to note is that services people want from the government would be performed without the government. But anything they do is done with the resources of some entity other than the government is the point ( generally the taxpayer ). In this sense I think we can assume a resource is a type of asset. Any money, land, or service provided then is paid for by taking the money from one person and distributing it to you in the form of which ever you picked above.
 

Jeremy, I guess my point was that I don't think that's true (though I can certainly see the intuitive force behind it). For example, consider the service of project insurance for nuclear power plants. Certain legal uncertainties currently make it difficult (though perhaps not impossible) for the market to provide this insurance. For example, if there were a catastrophic failure at a plant and the insurance providers were held liable for the damages, it would very possibly bankrupt any insurer. This is a risk that most insurers simply want nothing to do with. If we as a society are willing to live with the risks of nuclear power plants, then we might lament the fact that a lack of insurance is preventing them from being built. So one thing the government could do would be to define standards of liability in such a way that costs resulting from catastrophic plant failures would not fall entirely on insurance companies who took on these contracts. Perhaps in the event of a catastrophic failure, compensation to victims would be subsidized by the government (there might be moral objections to this, but that's a different issue).

In this example, the liability regime would seemingly qualify as a "resource" for companies looking to build nuclear power plants. And while we might be able to tell a story in which the free market could provide the same service of defining liability, that's not the same thing as saying that the resource was not created by the government. Surely the government would have used certain resources extracted from citizens in order to produce this new resource, but the new resource is not simply the sum of those old resources, nor is its value necessarily related to the value of the inputs.

Of course, nothing I have said here should suggest that I think that governments should typically be in the business of producing resources. I'm just arguing the conceptual point that they can.
 

Interesting, so your point is saying that while paying out that insurance would result in the government distributing resources, the presence alone is not. And that presence without the payout offers value to those nuclear plants wanting to build. I'm probably not the best person to argue against that and you make a very strong point.
First I would touch on the private sector not handling this outside of the government. Generally if the costs counter the gains that makes it a bad investment. Saying that without the government we wouldn't indulge in a bad investment seems interesting to me. I know 0 about nuclear power, but if there is so much risk, I would hope that the power is easier to acquire thus increasing the gain to counter it. If that's not true, then the technology doesn't exist to make it viable yet.
For the resource point, I can't say I can prove you wrong, it's more perspective. You look at it as a value to the plant because they can build, I don't look at that as a resource until the government has to pay out because they're not really providing anything other than a "guarantee". A guarantee that they will give you someone else's money if something happens so a company will insure you.
 

Well I definitely wouldn't want to offer the argument that because it's a resource, it means that it would be okay for the government to provide it. I'm just trying to engage one particular argument. Ultimately, I would tend to agree with its conclusions; I just don't think it's the best way to support those conclusions.

With regard to nuclear plants, the issue is not that they're particularly risky -- only in the USSR has a disastrous failure ever occurred at a nuclear plant. And it's a pretty safe bet that no nuclear plant in a free market would ever be as poorly managed as the Chernobyl plant was. But there's always a risk, matter how small, that something will go seriously wrong, and the trouble with nuclear plants is that if something like that happens, the entire surrounding area could be destroyed, thousands of people could die, and millions of people could be impacted.

Considering how tiny the chances are that something like that could happen, it might be reasonable to think that building nuclear plants is overall a good social investment. But it will nevertheless be true that if a disaster happened, it would be impossible for any insurance company to cover the damages -- it just wouldn't make sense for an insurance company to have assets like that. You're right that if we're going to protect the victims, we'd have to make the guarantee backed with taxpayer dollars. But no one's arguing that the government can create resources for free -- just that it can create resources that might potentially be difficult to create on the free market.
 

Danny,

It's a fair point, and it's always a struggle to dumb something down into a soundbite that makes an important point, and yet might be technically misleading. It's sort of like Gene Callahan's quibbling over me saying that the Fed creates money "out of thin air."

You're right that my use of the phrase "the government just moves around resources" reinforces a false view of material wealth; by the same token we could "prove" that Wal-Mart offers nothing to society.

But then when we push it back a step and ask why Wal-Mart makes people better off, you see that those things don't apply to the government.

And at the basic soundbite level, I'm trying to get people to see that bailout money (or whatever) comes from somewhere.

So I actually think what I'm saying is true--i.e. that the government doesn't create wealth through its activities--but you're right, my quick reasoning by itself is a non sequitur.
 

I think that's probably fair. I guess I just don't like that soundbite -- I've had a few too many conversations with people who have interpreted it (in its various forms) without the kind of nuance that it gets from people like you. In any case, that's not your fault; I just figured I'd point it out.
 

Contemplationist,

Gary Johnson is great, but were it not for Ron Paul, I would be neither a libertarian nor a student of Mises and the Austrian School of economics. In a presidential race, a Representative may not have the same kind of clout a Governor has, but Ron Paul has a spotless record and an accumulated wisdom that is unmatched by anyone in politics. If Ron Paul should run for President again in 2012, I will support both Ron Paul and Gary Johnson equally, in every way, as I think all libertarians ought to.