Reasonable people can argue about what part governments should play in the workings of a modern economy.
Should they run deficits and go into debt so that they can spend money on roads, bridges and social programs, or should they focus on keeping taxes low and budgets balanced? Should they help some companies succeed, or is picking favourites a mistake? Should they protect industries from overseas competition, or tear down the dikes and let them sink or swim on their own? Should they raise taxes for the rich and transfer the wealth to the poor and the middle class, or should they lower taxes on the rich to attract investment?
All of these things are up for discussion. But, by the year 2017, there should be general agreement on three things that governments should not do under almost any peacetime circumstance.
One is decide what people in the private economy should charge for things. Setting prices by government decree inevitably distorts the economy, as decades of experience with price controls and subsidies around the world has shown. The second is to decide what people should be paid for their work. In a market economy, it’s far better for governments to stay clear of that. The third is to run companies, especially companies that simply sell things to people, rather than deliver a service. Government officials make lousy merchants.
Marcus Gee – Globe and Mail – September 22, 2017.
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