^NetRunner,

If you are honestly interested in learning a different perspective, then we can talk it through. As a disclaimer, you aren't going to learn as much if you've already made up your mind before we even start a discussion.

When solving a problem, one invariably has to make assumptions. The problem is what assumptions need to be made? Economic theory is valuable when it can make accurate predictions. If it cannot make accurate predictions it is not very useful. A robust economic theory should explain all situations -- especially simple ones like my lemonade example.

Let me respond to your points so we can continue the discussion.

You said "In my mind, you're forgetting the sidewalk the kids built their stand next to, that makes their enterprise possible. That's part of what that tax money is for."

That is a valid assumption, but doesn't it just add an extra layer of complexity? Sure, we can include it in an analysis, but shouldn't a good theory be able to make accurate predictions without that assumption?

You said "Can you deny that the Interstate Highway program created wealth? Incentives for a transcontinental railroad spurred growth? Trust busting of the oil and rail companies in the early 20th century restored competition? The invention of the internet?

To answer those questions we first have to know and understand what wealth is. You are asking here the definition of wealth. To ask what creates it without knowing what it is would be putting the horse in front of the cart.

Why don't we focus on that first, as I still think there is some confusion

Here are some definitions of wealth:

"the annual produce of the land and labour of the society"
"anything that has utility and is capable of being appropriated or exchanged."
"rich or valuable contents or produce"

Essentially, wealth is a measure of the value or utility of an object. Essentially, all objects are valuable (given the correct knowledge) so when you think of wealth, you should just think of "tangible goods." For example, bread, milk, cars, houses, land, cows, computers, metals, factories, paper, roads, etc. Money is different because it is an object that can be exchanged for something else more valuable than what it is itself. This is not a problem, but if you really want to understand what wealth is, try to ignore money for the time being.

Wealth is created when the value or utility of objects are increased. This is done only by physical labor. New ideas or inventions can be used to find new ways of creating value with labor, but ideas alone do not create wealth. For example, wealth is created when a farmer sows a lemon seed and grows a lemon tree, and again when he picks a bushel of lemons, and once more when his children make lemonade. In each step, wealth was only created by physical labor. The lemons did not arrange themselves into bushels, nor squeeze themselves into glasses. Lemons cannot create wealth because lemons cannot perform labor.

So now that we have defined wealth, I will attempt to answer some of your questions. Let me preface this by saying that the answers to these questions should not depend on ideological affiliation. I am going to be strict in my answers because that is what science requires.

1. "Can you deny that the Interstate Highway program created wealth."
The highway program undoubtedly created wealth because people where hired to perform labor: they built roads. However, in the context of this question what you are really asking is, was more wealth created with this money than would have been created in the hands of individuals? I will come back to this, but for now it is important to remember that wealth can be measured in all items, not just roads.

2. "Railroad spurred growth?"
A railroad is wealth. Wealth can most certainly be used to fuel growth. Another example is food.

3. "Trust busting of the oil and rail companies in the early 20th century restored competition?"
I don't think this is pertinent here so I'll save it for another time, if you don't mind.

4. "The invention of the internet?"
An invention is an idea which provides a new way to use existing materials. It is a new plan for labor. The idea of the internet can be used to create wealth, but it does not in and of itself create wealth. Another example is the invention of fire. The idea of "fire" gave a new plan for labor: rubbing sticks together, but the idea of fire itself is not enough to create a flame. Someone must actually perform the labor to create fire, which is wealth.

6. "NASA, The space race and all the discoveries they've brought about?"
Nasa is a group of people who in part, physically build space ships which are wealth. They are performing labor, so NASA does in fact create wealth. As with the interstate program, the context in which you ask this is, was more wealth created with this money that would have been created in the hands of individuals?

8. "the much maligned public education system?"
Teachers perform labor when they impart knowledge to students. Ideas alone are not wealth, as they do not alter the value of existing materials until they physical manifest themselves in the form of work. However, if one views a person as an object, then a person may be considered "more valuable" if they have greater knowledge, for example. Educators can be said to create wealth, but only in this abstract way--as ideas do not have real utility until they manifest themselves as work.

9. "national healthcare systems seem to play a similar role in optimizing their human resources."
Doctors create wealth because the body is an object which has value. For example, a broken leg may be of less value than a functional leg, so when a doctor performs work (setting the bone, creating a cast) he is doing work to increase the value of the leg--he is creating wealth.

If we are on the same page about what wealth is and how is created, we can try to answer the question "can the government create wealth?" As I alluded to in #1, the question is, technically, "can labor in the hands of the government create greater wealth than labor in the hands of individuals?" If we are not on the same page, and there is still confusion or contention, lets get that out of the way first.

imstellar, I think you've made a good case for how kids with a lemonade stand are creating wealth, but I'm not sure I concur with your view of what government does with taxes.

In my mind, you're forgetting the sidewalk the kids built their stand next to, that makes their enterprise possible. That's part of what that tax money is for.

I think you're making an argument about government subsidies. Sure, it's a fair argument to say that subsidies in themselves don't create wealth in an economic sense, but the chief arguments made for them aren't economic in nature. That said, I'll concede the point, subsidies don't create wealth.

But that's not the only thing government can or does do.

There's definitely something to the idea that people will be more fully invested in their work if they feel a sense of ownership, but that's more a function of effective management, and doesn't require actual ownership. By the same token, I don't think people will always be unwise with money they receive as a gift/subsidy/tax cut, just as they have quite clearly proven that they will not always be wise with how they spend what they earn.

Can you deny that the Interstate Highway program created wealth? Incentives for a transcontinental railroad spurred growth? Trust busting of the oil and rail companies in the early 20th century restored competition? The invention of the internet? The space race, NASA, and all the discoveries they've brought about? Even the much maligned public education system seems to me a crown jewel of achievement in terms of empowering individuals and enhancing wealth. In other countries, national healthcare systems seem to play a similar role in optimizing their human resources.

Sure, government doesn't seek to turn a profit, but it does seek to catalyze economic growth (to borrow a phrase from Obama's speech tonight).

To deny that government can create wealth seems to be turning a blind eye on what government has already accomplished, and to refuse to see the role it plays in creating and preserving the private economy.

>> ^burdturgler:
"This is simply unbelievable ..."
It's a great accomplishment for them but, welcome to 40 years ago. It's not really all that impressive. Those disrespectful condescending announcers apparently haven't noticed the hundreds of milestones NASA has continuously accomplished. Landing vehicles on Mars, deep space objects beyond the solar system, landing on an asteroid .. on and on.
Congratulations. You did a spacewalk. You waved the flag. But you guys are a bit late for the space race so maybe spend more time focusing on your own shit and less time bashing America. Douchebags.
/rant


+1'd your comment to try to even it up, thanks for having the bravado do call this for what it is.

You are absolutely correct and kudos to Crake as well for pointing out that the government had mistakenly sent out a press release confirming the success of the mission, a step-by-step analysis of the launch and even some dialogue before it had even occurred!

I hope those "lunar landing" conspiracy theorists take this video with a kilo of salt. If anyone is conceited enough to fake footage (so it looks "good"), it has to be the Chinese.

Everyone realizes they just bought blueprints of Russian equipment and bankrolled a knockoff, right?

"This is simply unbelievable ..."
It's a great accomplishment for them but, welcome to 40 years ago. It's not really all that impressive. Those disrespectful condescending announcers apparently haven't noticed the hundreds of milestones NASA has continuously accomplished. Landing vehicles on Mars, deep space objects beyond the solar system, landing on an asteroid .. on and on.
Congratulations. You did a spacewalk. You waved the flag. But you guys are a bit late for the space race so maybe spend more time focusing on your own shit and less time bashing America. Douchebags.
/rant

Is it not horrendously sad that it is indeed possible that a party could win the US presidential race by putting a complete no-brained person like Palin into the position of VP simply to garner a whole lot of publicity, thereby taking the heat off... oh, I dunno... REAL ISSUES?

Isn't that just enough to make you weep?

That

a) A party would stoop that low
&
b) The majority of the populous of the most powerful nation on earth... WOULD FALL FOR IT?

Fucking hell we need more money pumped into the space race so we can all have our own space ships, and all chose our own planets to colonize... urgh.

Every line of this is a sexual innuendo. It doesn't really have anything to do with the space race.

Fucking hell!!!! Terrible *music and so so bad....

LONG LIVE SPACE RACE!

Completely relevant still. Hungry children. Costly medical care. Educational failings. Space race.

At least you could listen to the man talk. Oh for this level of pandering today... i would even humor them with a vote for such.

Tags for this video have been changed from 'russian, propaganda, space race, beeping' to 'russian, propaganda, space race, beeping, 50s' - edited by swampgirl

Thanks cheese, I'm indeed not supporting war. But I am saying technological developments can come from the military. Of course it would be better if money was put directly into civil research but under US government military funding the only way many scientific programs can get funding. The Cold War brought lots of technical innovation, just look at the whole space race.

Comment hidden because you are ignoring dag. (show it anyway)

Great post!! Coincidentally I was just reading the cover story in Wired Magazine about the new Space Race. I don't think Armadilllo got much mention - but they probably deserve it. I've been following their progress for a few years. I didn't know they were so far along. The modular system is pretty unique - and it looks like it would work.

Just thinking of the math though - I would think those little rockets would use up their fuel pretty quick. So that means that although they have the power to get to orbit - it would have to be a quick ride, with uncomfortable G-forces.

No vote; won't even bother watching.

Do you really think that America's primary competitor in the space race, Russia, would have sat idly by while a hoax was pervaded on the entire planetary populace? Ask yourself if they wouldn't notice the distinct lack of a rocket's radar signature. Beyond just Russia, there were other nations in the race. Why were they silent? What about all of the professional astronomers - ho paid them off? And the amateurs?

Please lay this conspiracy theory to rest. There are better ones out there.