… is from page 96 of my late colleague Jim Buchanan’s 1960 monograph, “La Scienza delle Finanze”: The Italian Tradition in Fiscal Theory, as this monograph is reprinted in James M. Buchanan, Externalities and Public Expenditure Theory (2001), which is volume 15 of The Collected Works of James M. Buchanan:
[P]erhaps the most effective means through which the modern executive authority can distort public thinking concerning the efficiency of public expenditures lies in the use of generalized categories which are largely meaningless to the voter-taxpayer. In recent years in this country, almost all types of expenditure have been justified by the catch-all category “national defense,” and active attempts have been made by the bureaucracy to render this budget category sacrosanct.
DBx: Because any society that offers, as ours does, high standards of living to the masses is a society of deep specialization and on-going exchange among multitudes of strangers, everything truly is connected in some way to everything else. As such, it is nearly impossible to find an activity – be it production or consumption – that does not, to some degree, exert some influence on (say) national defense.
Are Americans buying steel from Brazil? Well, our doing so reduces steel-production capacity in America, thus compromising Americans’ arsenal of weapons.
Are Americans importing bubble gum from China? Well, not only do these purchases reduce the demand for American-grown sugar, thus making more vulnerable Americans’ food supplies in case of war, they also enrich the Chinese, whose government will be made better able to extract resources from them in order to build up its own military in opposition to ours. And, yikes!, we Americans are also buying medicines from China. The dangers of this arrangement are too obvious for words!
Oh, look over there. Is Senator Smith seriously proposing to cut national-government financing for higher education in America? Does he not understand that doing so will mean fewer American scientists and engineers and, hence, a weaker ability for us Americans to maintain a top-flight national-defense apparatus? How irresponsible and short-sighted of the senator!
Equally myopic is Rep. Jones, who opposes higher taxes on the rich to reduce income inequality. Is she unaware that some research shows that the more unequal is the distribution of income, the greater the alienation of those at the bottom of the distribution from society? Such alienation can only weaken our national defense by reducing the resolve of ordinary Americans to protect our nation.
And let’s not forget those elite, chardonnay-sipping intellectuals at think tanks such as the Mercatus Center and the Cato Institute who, blinded by ideology, oppose proposals for American industrial policy. Can these market fundamentalists not see that Beijing is using industrial policy in hopes of ensuring Chinese dominance in the coming decades? If we wish to keep America strong, both economically and militarily, we must, in response, adopt our own industrial policy. Only then will we protect Americans – including American workers – and prove to the world the superiority of freedom over authoritarianism.
