Blue Whales and Growth in Government; D. Lee

From an initial population of ap proximately 200,000, it is estimated Dwight Lee is Associate Professor of Economics, Cen ter for Study of Public Choice, Virginia Polytechnic Institute and State University. 606 that fewer than 6,000 blue whales are still Iiving. The costs of killing another blue whale include the benefits sacrificed by reducing their future availability still further. But even though al\ whalers would like to see more whales live to bear young and increase in size, each knows that the whale he does not harpoon today will probably be harpooned by some one else tomorrow. The whaler who harpoons now gets all of the benefits but suffers only a small share of the cost resulting from fewer whales in the future. Most of this cost is spread over others. Of course each whaler also loses from the excessi ve harpooning of others. But this loss would only be greater to the individual whaler who reduced his own harvesting. The in centive is for each to continue killBLUE WHALES AND GROWTH IN GOVERNMENT 607 ing whales as rapidly as possible even if this means the eventual ex tinction of a majestic species.

A very similar situation exists when special interest groups cap ture benefits from government spending. Many government pro grams convey benefits to specific groups by spreading costs over all taxpayers. Farm subsidies, Amtrak subsidies, urban development pro grams, and the Chrysler bailout are but a few examples. Federal spend ing on programs of this type has been increasing at an alarming rate. Programs which serve the primary purpose of simply transferring wealth from one group to another are taking approximately $350 bil lion of the Federal budget in fiscal 1981. This is more than the entire Federal budget in 1975. All special interest groups may be aware of the tremendous burden that comes from rapidly enlarging the size of government. But each group also knows that passing up an op portunity to expand its favorite pro gram will merely make it easier for other special interest groups to ex pand theirs. The motivation is for each to continue pressuring the gov ernment to spend more even if this means the eventual collapse of the economic productivity that supports all government spending. And there should be no mistake about it. Just as the blue whale can be driven to extinction by excessive harvesting so can our economy's productivity be extinguished by excessive govern ment.

There are two ways an individual can acquire wealth. The first way involves engaging in productive ef fort. By producing things that oth ers value this effort benefits every one. The other way to acquire wealth is to capture the wealth others produce by engaging in transfer ac tivities. Transfer activity can be il legal as with theft, or legal as with lobbying government for preferen tial treatment. But in either case it directs otherwise productive effort into activities that create no new wealth. One of the most important functions of government has always been to encourage productive enter prises by penalizing the illegal transfer of wealth. In writing the U. S. Constitution our founding fa thers also attempted to reduce op portunities for using government to legally transfer wealth from one group to another by limiting the scope of government. The desire was to establish an environment in which individuals could advance their well being only through the creation of new wealth.

Unfortunately the constitutional limits on direct government in volvement in economic affairs began breaking down in the late 19th cen tury. At first the involvement was minor and only a few found using government to confiscate the wealth 608 THE FREEMAN of others more profitable than pro ducing wealth themselves. But once this confiscation started the return to productive effort was reduced. This increased the number who found the advantage in harvesting govern ment favors at the expense of those who remained productive. This fur ther reduced the return to produc tive enterprise thus diverting yet more people into transfer activities. As this destructive process contin ued even those who persisted in the creation of wealth found their pro ductivity hampered by the need to protect their property against an in creasingly grasping government. This trend cannot long continue without threatening the well-being of all; the producers of wealth as well as those they support. When all ships are busy transporting valu able products the first one to become a pirate can do very well indeed. But How Government Grows as more turn to piracy fewer find ad vantage in continuing to ship the goods. Unless strict sanctions are imposed against piracy the end re sult will be impoverished shippers and pirates alike as ocean transpor tation comes to a halt.

Those who argue that, if the blue whale is to be saved from eventual extinction, limits will have to be placed on their slaughter are cor rect. And for the same reason, if the productivity of our economy is to be saved from eventual collapse, limits will have to be placed on the growth in government. As important as it is to protect the blue whale, it is far more important to maintain our eco nomic productivity. Destroy the economy's productivity and you de stroy the wealth that allows us to take our food, clothing and shelter for granted and worry about such things as the blue whale. Ii IDEAS ON LIBERTY THE maximum flow of creative human energy and the utmost in volun tary cooperation among individual free men are called forth only when government is limited to the equal protection of the inherent rights of free and responsible human beings. To the extent that this basic life principle of a free society is implemented and safeguarded within a nation, the people of that nation will achieve balanced development and growth. Most of our reform laws violate this basic principle in that they penalize the producer and reward the "free rider" who consumes more than he produces. Thus the flow of creative human energy is increas ingly inhibited as "liberal" laws authorize more and more unearned withdrawals from the stream of goods and services provided by the producers.

w.e. MULLENDORE Ridgway K. Foley, Jr. PRIOR RESTRAINT "Ideas have consequences" observed that eminent historian, Richard Weaver/ and so they do. But ideas do not only produce, occasion or ef-, fect consequences; they are also re sults of earlier ideas, principles and concepts which, in turn, proceed, true or false, from the gray matter of the human mind. When one happens upon a particularly perturbing doc tine, particularly one which has be come accepted to the extent of be coming axiomatic, it becomes fruitful to unveil the causal linkage and probe the aura surrounding the ver bal deity. I propose to do just that with the concept of "prior restraint," a praxeological doctrine now writ large in the juristic process. In short, let us identify the subject and dis cern from whence it came and whither it leads. Mr. Foley, a partner in Schwabe, Williamson, Wyatt, Moore & Roberts, practices law in Portland Oregon.