The State Causes the Poverty It Later Claims to Solve

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We spend a good amount of time arguing against the expansion of the state. We particularly don’t like it when the state and special interests, banks, other large industries, unions, etc, come together with the state. We argue that the state must be reduced in size to reduce the system of corruption we now are witness to.

But invariably we get pushback from those who believe that the state is a mitigating force when it comes to the power of industry (in our opinion this is obviously a myth, but a widely held one) and that a large government is beneficial, for sake of societal “justice.”

Though we understand this position, and sympathize with the goal of justice, we hold that the state is the most unjust force of all. It solely enjoys the monopoly of force, and has throughout history abused this monopoly to the detriment of humankind, more than to its benefit.

In fact many of the things people insist we need a large state to address are actually caused by the state in the first place. But this is not obvious and is why even in the 21st Century, in a time of general decentralization, crowd sourcing, and social media, the cult of the state is still strong.

The attached article does a good job of explaining in simple terms why large government is actually counterproductive to human progress.  Once the average person understands why this is true the world, at least marginally, will be a better place.


The uneven distribution of price inflation is known as the Cantillon effect. Those who receive the newly created money first (primarily the state and the banks, but also some large companies) are the beneficiaries of easy money. They can make purchases with the new money at goods prices that are still unchanged. Those who obtain the newly created money only later, or do not receive any of it, are harmed (wage-earners and salaried employees, retirees). They can only buy goods at prices which have, in the meantime, risen.

Click here for the article.