Keith Self: Economic development

Friends,

The Commissioners Court will consider economic development policies during our February 7 meeting. I will outline my position along the lines of the post below.

One of the most well-known phrases of the Declaration of Independence is, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”

Did you get that? Governments are established to secure the rights of individuals.

However, government spending is THE issue of our day, not securing your rights.

This issue recently swirled around the State of The Union address; namely, more government spending as investment. The President made clear that he fully intends to continue government spending and control of our economy under the rubric of investment. He said, “Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine.” Can the President really think that government spending, not the private sector, is the engine of our economy?

The Commissioners Court will discuss the same issue as we consider our policies that basically give tax “rebates” to a company or a specific area for economic development. Economic development is a noble goal, but let’s examine the ideas behind government taxes supporting economic development.

Tax policies to drive any number of actions are well accepted today and have the best of intentions. However, as Freidrich Hayek, the author of “The Road to Serfdom” wrote, “If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion.” Your county taxes, for example, are not voluntary.

Ronald Reagan understood the issue. In his famous 1964 speech, “A Time for Choosing”, he said, “A government can’t control the economy without controlling people. …outside of its legitimate functions, government does nothing as well or as economically as the private sector of the economy.”

Milton Friedman, one of the great proponents of individual liberty in the last century, in his introduction to the 50th anniversary edition of Hayek’s “The Road to Serfdom”, “…the promotion of collectivism is combined with the profession of individualist values… Many of those who profess the most individualistic objectives support collectivist means without recognizing the contradiction.” He is saying that some talk a good game on individual liberty, but do not govern that way.

He goes on to say, “To understand why it is that ‘good’ men in positions of power will produce evil, while the ordinary man without power but able to engage in voluntary cooperation with his neighbors will produce good requires analysis and thought.” Results of collectivism are not related to the character of those in elected positions; but to collectivism itself.

Friedman also said that collectivism is simply inefficient. Government does not do a good job of allocating resources. Remember Reagan’s quote above. Why would we believe that we will do better than the private sector in allocating resources across the private sector?

The main stream of the Declaration of Independence, Hayek, Freidman, Reagan, and others understood that individual liberty is both moral and efficient; that collectivism is neither.

Our legitimate role? Provide core functions as required by the State; primarily, but not limited to various health care, certain government services, and a sound justice system. Beyond that, keep taxes as low and government as small as possible. That way you, and every private sector company in Collin County, decide where to allocate your resources.

I expect the county policies to pass by a majority vote. There are those who prefer that government tax more and control more. There is no consensus on the role of government.

The good news is that the $5.4 Million in tax rebates this year pales in comparison to approximately $63 Million remaining in private sector pockets just this year because of the slowing of county operating expenditures over the past few years. You allocated those $63 Million as you chose. And you did so freely.

Sincerely,
Keith

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