I have a fairly simple answer, because it's a fairly simple question. The US government allows for a huge variety of ways people can start a business and create and sell something, which is the biggest source of wealth generation into the economy. If the US government were more totalitarian and for example required that in order to sell anything you had to go through their network to get it approved, to get it tested, to get it approved again, and the whole thing cost multiple hundreds of thousands of dollars (and if it's rejected at any stage for any reason you have to start over), I don't think anyone would be able to create much wealth. You'd have the biggest corporations maintaining their revenue streams but innovation and creation there would be slow.
On the other hand, it doesn't matter how many avenues a government leaves open for people to create wealth in. At the end of the day some human brain has to think of something and act on it, it has to actually produce something. This may be someone envisioning a new car engine, contacting the necessary manufacturers to make a prototype, then getting a designer to build a car around it and then marketing and selling. This is a new thing that previously did not exist, created out of the squishy folds of human brains but kickstarted by a single human. The government allows this process to happen, but because of this then this process seems like it would happen regardless of if the government was there in the first place. (Furthermore at each stage there's opportunity for more wealth creation--maybe the new engine requires a new manufacturing technique that can be applied elsewhere, maybe standard car designs won't work with this new engine and so a new design must be imagined that may be useful elsewhere too.)
Clearly there is some middle ground. The non-action of everyone around you lets you do what you please, and some people create things as what they please. If the government can help in more of these kinds of people being able to do what they please and then creating things, good! It's largely a case of the government just leaving them alone. But there are many cases where the government has an arbitrary series of hoops one must jump through, like getting a designer drug that makes you think your dick looks a centimeter longer approved, that prevent anyone from doing what they please in this area of the economy. Many health industry problems are easy to solve but they're made artificially impossible due to the government's artificial restrictions, usually in place to keep the Big Boys in power.
I side firmly on the side of the government can encourage wealth creation, mostly through direction inaction, but any direct action it takes is most likely to hinder wealth creation. Ahem, copyright.
Anyway, it doesn't actually matter! Observe the power of modus tollens, the second most basic rule of logic.
We assume that government action or inaction creates wealth. (It's responsible for it.)
We notice areas with a strange absence of wealth.
Therefore, there is no government action or inaction in this area. Maybe we should look into that.
This is a conclusion everyone can share, we can argue over how we derive it later. Sometimes government action can help (I personally think most of the time it doesn't), sometimes government inaction can help (on the other side of the fence people think government inaction is synonymous with chaos).
I wish the US government would create a free public wifi network for the whole United States. It doesn't have to be very fast, even dialup speeds would be acceptable, I just want a free way to wirelessly transfer bits to the internet at large from anywhere and for free. Whether it's a g3 network, a mesh network using all those routers in the dumps, or something else, I want free public wireless internet!
Why, you might ask? Because I can see a gaping hole of emptiness in this area where wealth could sit instead. The Raspberry Pi is a $25 credit card sized computer entering mass production as I type. It's a fully general computer the size of a credit card! It can be anything! And if it can't connect to the internet at any time and any place and send some data to some website, with the user required (unless that's desired of course) to set up a network, to only use it at home, to only use it for 13 minutes a day, or some other stupid limitation that makes the thing useless because it can't painlessly connect to the internet for free, then no one will want one.
But if it can connect to the internet for free...
It's relatively easy to write a piece of software and host it on the web. This software can easily leverage thousands of machines on Amazon's network if it needs to for pennies. So you have this credit card sized computer with some sort of sensor on it, and every second or whatever it sends the sensor data to the website. The website crunches on that data with a huge number of machines in the background for several milliseconds, and sends a response back to the credit card computer telling it to do something cool. The credit card computer may even have a screen or speakers or a microphone or a pepper spray or... it could be anything and it's not artificially limited like a cell phone--and for $25 a pop with other models being smaller/cheaper/cooler people could have tons of these things, more than they have keys.
This is a relatively easy, direct action the government could take for the betterment of its citizens, for humanity, and for the economy. All of these unemployed people can go talk to their neighborhood smart kid and say "here's a simple idea, think you could make it work on one of those credit card computers sold in stores? We'll split any profits according to some agreement." The kid makes an app, he can sell it online or sell it bundled with a credit card computer with the necessary attachments or whatever, and suddenly these old people with nothing but ideas left have a form of income again. There are a ton of other ways this can happen too, or maybe the amount of tax collected from the amount of wealth generated will be enough to let old people live in comfort without needing to have an idea and without every political debate being a shallow argument over whether social security is funded or not.
Government inaction is not the answer here, government action is.
Sigh. A guy can dream right?
Posted on 2012-02-06 by Jach