O Intermitente<br> (So long, farewell, auf weidersehen, good-bye)

O Intermitente
(So long, farewell, auf weidersehen, good-bye)

quinta-feira, janeiro 06, 2005

Leitura Recomendada

"Toward a Limited State" de Leszek Balcerowicz no Cato Journal.

Economics does not give a clear answer to the question of what the state should do. The proximate reason for this is the difficulty in applying its basic theoretical concepts, those of public goods and externalities, to the real world. A deeper reason is the neglect of basic economic liberties, as the framework to determine the limits of the state's activity. Even in Western countries, the intellectual and constitutional position of economic liberty was seriously eroded during the 20th century, which paved the way toward the expanded state.

The expansion of state activity - that is, the growth of stateimposed restrictions on economic freedom - is difficult to justify by improved economic performance. The opposite seems to be true: the more radical the expansion, the greater the economic damage. Various forms of state expansion can also be linked to corruption, tax evasion, the shadow economy, and the weakening of the state's protection of remaining economic freedom. Many deviations from a limited state tend to increase the share of the most disadvantaged persons, such as the long-term unemployed.

It should not be taken for granted that if the state remained limited (i.e., focused on the protection of basic liberties), certain services would not be provided and people would be worse-off. The potential of voluntary cooperation, which includes both profit-oriented market transactions and mutual-help arrangements, should not be underestimated. There are also various individual coping strategies. In fact,
the expansion of the state might have driven out much nonstate activity and blocked the development of new, potentially beneficial private arrangements. There is, therefore, a strong case for recognizing that a limited state is the optimal one.

The last 20 years have witnessed a tendency to move away from expanded states toward more limited ones. This shows that the task of limiting the scope of the state's activity and thus releasing the potential of voluntary cooperation and individual initiatives is not impossible, even though the transition is far from completed and fraught with difficulties. There will always be some people who see benefits (power and economic rents) in limiting other people's freedom. And there will always be some ideologues that attach an emotional value to the state's power or distrust voluntary cooperation.

One should use every appropriate moment to anchor a vision of a state constrained by the framework of basic individual liberties in an effective constitution. There are other limits on the state's discretion that are surrogate defenses of individual freedom. Institutionalized fiscal constraints can help to limit the growth in public spending and, therefore, in taxation. Central bank independence blocks the recourse
to inflationary financing of budget deficits and thus protects individuals against the imposition of inflation taxes. Membership in the World Trade Organization limits the countries' use of protectionist measures and helps protect domestic taxpayers and consumers. These and other second-line defenses should be introduced or strengthened.

posted by Miguel Noronha 10:03 da manhã

Powered by Blogger


"A society that does not recognize that each individual has values of his own which he is entitled to follow can have no respect for the dignity of the individual and cannot really know freedom."

mail: migueln@gmail.com