Politics as externality

Externality is generally viewed as a market failure. Here it is not the time to discuss neither the credibility of this claim, nor the credibility of the collateral claim, that the state can solve the problem. Externalities, in most cases, causes allocative inefficiency and have nothing to do with Pareto optimality (which means that state intervention will make victims, other than the poor tax-payer, damaging some individuals with coercion). Ironically, the only Pareto-inefficient example of externality I know is the tragedy of the commons, which is due to the lack of clear private property rights...

Anyway, what I want to make clear now is that the state itself is the greates producer of externalities in society. This was clear to classical liberals such as Bastiat, who defined the state as "Government is the great fiction through which everybody endeavors to live at the expense of everybody else".

The easiest example is taxation... but, I mean, everybody can understand that to spend other people's money is an externality, causes excess consumption and parasitism...

But what about retirement plans? The costs of actual retirements are paid by actual workers. No one needs to save for his future, and no one has any incentive to behave like the ant of the fable. Everybody hopes to find enough youngsters to reduce to serfdom, promising them they will have other serfs in a remote future...

But this scheme is self-defeating: it can work during a baby-boom, because there are many more young serfs than old masters. It will not work in the future, when the serfs-to-masters- ratio will become smaller than one.

Besides, saving is useless, because their benefits will be externalized through political robbery (namely, taxation), and because the economic heritage of Mr Keynes, public debt and deficit, requires monetary inflation, which further exploits and damages the "ants".

Sooner or later, youngsters will pay the price of welfarist demagoguery. For the moment, let's keep on name "social justice" what is unsustainable parasitism and exploitation... it is better to name bad things with appealling names... a trick that every politician knows full well.