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Tuesday, 30 April 2024
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Written by John Hood
It might sound odd to hear this from someone who’s been writing a syndicated column on politics for nearly four decades, but politics has become vastly more important in our lives than it should be.
Virtually every decision we make in our ostensibly free society is now subject to review, refinement, and reversal by some government agency. We can’t buy or consume what we want, hire whom we want on mutually agreeable terms, inhabit and dispense with our property as we want, or make critical decisions about our families’ education, health care, and financial planning without the intrusion of governmental “helpers.”
I’m not an anarchist. Modern civilization and human progress are impossible without governmental structures.
When administered effectively and constitutionally, governments promote law and order, adjudicate disputes, and ensure the provision of certain public goods that for technical reasons can’t be delivered purely by voluntary means.
That’s not to say human beings can’t live without government. For most of the history of the species, humans lived in small hunter-gatherer bands, consisting largely of relatives, that came together only occasionally to swap, socialize, and find mates. In some places, these social bonds developed into tribal confederations and, later, into chiefdoms.
But not until a few thousand years ago did true states appear in an anthropological sense — social institutions that established a “monopoly of the legitimate use of physical force within a given territory,” as Max Weber famously put it.
The invention of the state and the invention of cities were interrelated events. The word political comes from the Greek polis, for city-state. Civilization both creates and requires politics in the sense we use the term today.
Humanity can live without government, as I said — but not long or well. Hunter-gatherers may have had more free time than we do, but they starved, shivered, and died early and violent deaths at far higher rates, too.
Tribes and chiefdoms weren’t much more conducive to human flourishing. Even early civilizations, built around cities and states, increased the total population and scope of human communities without necessarily raising the standard of living for the average person very much for very long.
What ultimately did the trick was the marriage of industrial capitalism and constitutional, liberalizing government during the 18th and 19th centuries, beginning in Northwestern Europe and North America and then spreading elsewhere. The public sector played a critical role in this gigantic and unprecedented leap forward in human wellbeing.
But it did so precisely because its power was constrained by law and custom.
In the American context, at least, modern conservatives should be understood as conserving a set of truly revolutionary ideas and practices. One such idea is that government is both necessary and dangerous. As James Madison put it in a post-presidency speech in Virginia, “the essence of government is power; and power, lodged as it must be in human hands, will ever be liable to abuse.”
By “power” here, Madison and other Founders meant coercive power — the capacity of government to force people at the point of a gun to comply with its commands. Whether republican or tyrannical, all governments possess such power. Again, it’s necessary. But it ought to be used sparingly, only for tasks that can’t be accomplished through market transactions, charitable activity, or simple persuasion.
That’s the case that my colleagues and I at the John Locke Foundation, and at other like-minded organizations in North Carolina and beyond, seek to make every day in our programs, articles, interviews, and public appearances. Our work is usually devoted to specific applications.
We advocate liberating North Carolinians to make choices for themselves about how best to educate their children, improve their health, pursue economic opportunity, and build the families and communities within which they live their lives.
Whether the stakes in a particular dispute we discuss seem big or small to you, keep mind that the broader principle couldn’t be more momentous: everything need not be political. Minimize government. Maximize freedom.
Editor’s Note: John Hood is a John Locke Foundation board member. His latest books, Mountain Folk and Forest Folk, combine epic fantasy with early American history (FolkloreCycle.com).
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Tuesday, 23 April 2024
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Written by John Hood
I’ve never been more delighted to be mistaken.
A couple of weeks ago, I wrote a column observing that, over the first eight months of the 2023-24 fiscal year, the state’s General Fund revenue was down slightly from what was collected during the first eight months of the previous fiscal year.
North Carolina faced no “fiscal emergency,” I wrote, but unless revenue collections were “bountiful” this spring, the General Assembly wouldn’t have lots of extra cash to work with during its short session.
Well, state economists have just released their consensus revenue forecast — and bountiful isn’t too strong a description. For the current fiscal year, they now expect $34.1 billion in General Fund revenues. That’s $413 million more than originally projected. As for the $34.4 billion now expected for FY 2024-25, that’s a full $1 billion more than the budgeted amount.
Why was this year’s “April surprise” so pleasant? Collections from the personal income tax finance about half our General Fund and typically drive our revenue trends. That’s true this time, as well, as income taxes are now expected to run 2.6% above the baseline this year and 4.2% next year. Sales taxes are also up, albeit more modestly.
Contrary to the expectations they formed last year, economists for the legislature’s Fiscal Research Division and the governor’s Office of State Budget and Management say our economy “demonstrated greater resilience and avoided a predicted period of stagnant growth, or ‘slowcession,’ in late 2023 and 2024. Instead, the April 2024 consensus forecast expects a ‘soft landing,’ with inflation easing toward the Federal Reserve’s 2% target even as the economy continues to grow at a modestly slower pace than in 2023.”
Could their new judgment be overly sanguine? Sure. Forecasting isn’t an exact science. But it’s now very likely the state will experience a surplus in General Fund revenue of about 1.2% for the fiscal year ending in June. And it is now reasonable for state legislators to assume something like a 3% overage when adjusting the General Fund budget for next year.
They’ll have more transportation dollars to work with, as well. Strong collections from the state tax on motor fuels will generate about $104 million more than projected this year for the Highway Fund and Highway Trust Fund, plus another $101 million next year.
Given the circumstances, you’d expect every state agency, local government, or private interest to line up at the Legislative Building, ready to pitch — and you’d be right!
As I have previously argued, some of these pitches ought to deliver results, as they are in the public interest and consistent with fundamental principles of fiscal conservatism. Lawmakers ought to raise pay for public employees, for example, with a particular emphasis on merit-based increases and hard-to-fill positions such as correction officers, lab technicians, and science teachers.
Also deserving consideration is the community college system’s Propel NC initiative, which would allocate more funds to high-demand fields such as advanced manufacturing, public safety, and allied health while instituting a three-year cycle for reevaluate spending based on job and salary data.
North Carolina is already in the process of phasing out its tax on corporate income and reducing its flat tax on personal income. That’s why next year’s revenue, while likely to exceed original projections, will rise just 0.7% over 2023-24.
Tax cuts are already baked in the cake, as it were. Still, the revenue revisions give lawmakers more fiscal space to tackle other tax-reform priorities while devoting additional funds to the Opportunity Scholarship program, which has attracted far more parents seeking educational alternatives for their children than currently funding can accommodate.
Under existing law, a portion of the General Fund revenue surpluses will flow automatically into state reserves and fund the construction and maintenance of public facilities. Prudence argues for devoting additional funds to high-priority infrastructure projects and to shrinking the unfunded liability in the state’s health plan.
There’s good news on revenues. Now, let’s keep delivering good policy.
Editor’s note: John Hood is a John Locke Foundation board member. His latest books, Mountain Folk and Forest Folk, combine epic fantasy with early American history (FolkloreCycle.com).
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