Study Guide to Man, Economy, and State with Power and Market

Chapter 12: The Economics of Violent Intervention in the Market 163
G. The Fallacies of “Public” Ownership
Government enterprises are not “public” despite the
common terminology. Citizens can test this theory by
trying to exercise control over, or sell their shares in,
“public” schools or “public” parks.
H. Social Security
Funds taken as “premiums” for social security
schemes are not in fact invested, but instead are spent on
immediate consumption by the government. Such
schemes are not true insurance.
I. Socialism and Central Planning
The extent of socialism is overestimated in formally
socialist countries such as the Soviet Union because of
black markets and foreign prices for capital goods, while
it is underestimated in formally capitalist countries such
as the United States because of government lending to
business. In the present analysis, a centrally planned
economy can be viewed as a centrally prohibited economy.
10. Growth, Affluence, and Government
A. The Problem of Growth
Government efforts to stimulate “growth” lower
utility because they force people to shift consumption
from present to future beyond what their personal time
preferences dictate. The Austrian understanding of the
heterogeneous capital structure also shows the danger of
arbitrary government “investment” in particular capital
goods.