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Is government too involved?

RON MANNERS is the managing director of the Mannwest Group ofcompanies, chairman of Croesus Mining NL, a counsellor of the Association of Mining and Exploration Companies Inc and executive director of the Mannkal Economic Education Foundation.



GOVERNMENT involvement usually falls short of our expectations and, in most cases, achieves the opposite of its intention.

When I ask politicians what they consider to be the ‘legitimate role of government’, I receive answers that are as confused as the various voters and pressure groups who clamour for more special favours for themselves, at the expense of everyone else.

The law of economics known as ‘concentrated benefits and diffused costs’ enables politicians to momentarily escape the consequences of buying-off the electorate, i.e. the provision of benefits to pressure groups, paid for by all taxpayers. Governments have no money, except that raised from taxes.

In the long term, the fantasy of everyone imagining that they can live at the expense of others comes unstuck when the rewards for the investors and risk-takers diminish to the point where risk investment dries up and, instead, goes into consumption.

Two of Australia’s largest investors recently indicated the only Australian investments that will ‘pay off’ are investments in ‘sport, gambling and entertainment’.

Currently, in Australia, there is almost no resource investment.

This fact is excused on the basis that “we are now a service economy, not a resource economy”.

But if we don’t get the balance right, we will have nothing for the service sector to service.

What is the ‘legitimate role of government’? Who defines what governments (federal, state and local) should be doing? (And, more importantly, what they should not being doing?)

In the US citizens are protected from their governments by one of the best written Constitutions in existence.

But they are now starting to ask questions about many government intrusions into activities that are beyond the restrictive role envisaged by their wise Founding Fathers.

Ever since the Magna Carta in 1215, kings and political rulers have been forced to admit that their power over citizens is relatively limited.

These restrictions were further refined in 1776 with the Declaration of Independence, which established, in elegant language, the principle that individual citizens are endowed with fundamental rights that pre-exist government.

In other words, man’s rights are not bestowed by a King or government.

Rights of life, liberty, property and the pursuit of happiness exist independently of government, not because of government. Governments are to protect and enhance those rights.

Without governments we would have anarchy. Murderers, rapists and thieves would make life miserable for everyone.

This clearly identifies the making of laws, the police force, armed forces and law courts to reinforce them as legitimate roles for government.

But, as the government’s tentacles extend, with more and more taxpayers’ money being spent on advertising political, taxation and republic issues, the government’s seemingly unlimited access to our money for advertising purposes is to be abhorred.

The more government spends for these and other functions, the less that remains for us to spend ourselves.

It is a direct attack on our economic freedoms when our hard-earned money goes in directions other than those we would choose for ourselves.

If we seek too much from the wrong source, we often achieve the opposite of our intention.

Instead of asking more of governments, let’s ask less — but insist these core functions be performed to the highest standards.

It is our duty to speak up when governments stray from their core activities.

Let me put it this way.

We expect freedom in Australia.

Freedom to choose the way we meet the challenges of life. Freedom to compete, to risk, to fail, and to succeed.

Nothing is more precious than freedom.

It enriches our personal lives and the lives of those around us.

And yet it can be taken away, if we allow it, by the same government that can assure our personal freedom.

Resolve to protest as government spends our money trying to influence us to its way of thinking.

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