Steven Douglas
Member
- Joined
- Oct 24, 2011
- Messages
- 1,956
Did I understand you here correctly.
Because the private sector might not have built the bridge, less people would be working, therefore less people buying both in the construction sector (materials for the bridge) and workers who could spend their wages to buy food, petrol etc?
But because the government decides to build a bridge, money is spent back into the private sector, creating this "artificial demand" that perhaps might not have existed had people not been taxed?
Do you mean artificial demand because public programs were not perhaps the choice of the consumers?
Yes, that last sentence, choice being the operative word. Anything funded by forced extraction (mandatory taxes) is a fundamental shift of one thing at the expense of another (even if private capital formation alone), and therefore an artificial market distortion.
It doesn't matter if there was some choice in allocation so long as "ZERO ALLOCATION TO ANYTHING" is not offered as a choice, and likewise, whether or not the fruits of a forced extraction are deemed valuable by anyone at all is wholly irrelevant to the fact that a fundamental SHIFT has occurred, and by force within the economy (as one thing is artificially mandated at the expense of others). This shift would not have otherwise occurred in the absence of that force.
If the private sector builds a bridge, similar dynamics could occur, but only with 100% willing participants on the finance/demand side, so no artificial distortion. All of that occurs in a free market that is fair game to any and all willing participants, supply and demand side.
Also, no assumptions are made with regard to the number of people working, or even where they came from. If I own a large private firm, and set up shop and put locals to work, I might also end up bringing new locals into the local economy. I might import all the labor, and put no locals to work. Whatever the case, my objective is only to offer goods or services at a profit, not to provide employment to anyone, which is wholly incidental. I may well cause competition to suffer, and I might even cause commonly used goods and services to be bid up before it is corrected with more competition for the supply of those goods and services. None of that matters, because as long as I am responsible for all the funding, all of the risks and rewards are mine, and the effects on various people's economies, beneficial or adverse, are mine to bestow or inflict, as the case may be, as a matter of right.
In the case of a work project, like a bridge, the element of choice (from whatever portion of the market would have made different choices, had the option to abstain been present) is DESTROYED--at the expense of something else that will not exist as capital in some other form.
Last edited: