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Wednesday, December 23, 2009

Hayek on the modern state.....

Wars expand the power of the modern state because the national planning to fight the war continues even during times of peace. This perennial government planning then expands the social-welfare state over time, with harmful results. Most importantly, economic activity is impeded by the growing state as people and resources become less productive. In other words, because the government does not create consumable goods and services, it is an economic burden to the productive sector of the economy.

Then as the government grows, interest groups become increasingly numerous and powerful, leading to political corruption. More wars or even foreign policy tensions and economic crises can propel demagogues and dictatorial leaders to expand further state powers, to the detriment of each and every one of us

Sound familiar?

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