Post
Topic
Board Economics
Re: Bitcoin could bring about smaller governments - and that is a good thing
by
BitcoinScholar
on 20/08/2013, 00:59:44 UTC
Goverment size depends on several factors, not just the percentage of GDP it consumes. Economies with qualified human capital and technological advance will be able to sustain the government's siphoning of funds. The specific political institutions, such as democracy or dictatorship, don't determine size of government. It's indicative of government size but not conclusive.

Governments are only institutions that capitalize on the monopolization of force and everything that the government has was taken from producers and workers. Of course government size determines economic conditions because if governments take more through taxes or inflate the money supply it profits on everyone's lose. Every country's economic-government relationship is highly relative which makes model building difficult. If an economy is strong and has qualified human capital it'll persevere longer and could maintain growth. Plus, governments manipulate employment rates and economic growth figures to keep the populace pacified.