The primary economic conflict, I think, is between people whose interests are with already well-established economic activities, and those whose interests are with the emergence of new economic activities. This is a conflict that can never be put to rest except by economic stagnation... The only possible way to keep open the economic opportunities for new activities is for a "third force" to protect their weak and still incipient interests. Only governments can play this economic role.But, as I found in a post by Arnold Kling, there is more to that paragraph:
And sometimes, for pitifully brief interludes, they do. But because development subverts the status quo, the status quo soon subverts governments. When development has proceeded for a bit, and has cast up strong new activities, governments come to derive their power from those already well-established interest, and not from still incipient organizations, activities and interests.The lesson is simple: What government can "give," government can take away.
More fundamentally, the first quotation above betrays a zero-sum view of economics. There is no real "economic conflict" unless economic decisions are taken to the political arena. It is a grave mistake to say (or believe) that the "only possible way to keep open the economic opportunities for new activities is for a 'third force' to protect their weak and still incipient interests. Only governments can play this economic role." There is -- or can be, in the absence of government interference -- ample support for "new activities" and new entrants to the labor force. That support comes from entrepreneurs who bootstrap themselves, and from capitalists whose investments underwrite new technology and job creation. Government interference -- through redistribution, regulation, and research funding -- hampers the undertaking of "new activities" and elevates political judgments above consumers' actual wants and preferences.
