Eating Away at GDP Growth Is Not the Same As Eating Away at Economic Progress

This distinction is lost way too often at Business Insider.  Sam Ro reproduces the following chart to make his point:

The good news is that less government spending means less government consumption. It means fewer scarce economic goods controlled by bureaucrats. This is not something to be distraught about. Of course, if one is a tax consumer, less government spending impinges on one's lifestyle.  The best thing that could happen is for the 800,000 furloughed government employees to seek employment apart from the leviathan state. The are already recognized as "non-essential." If that is the case, perhaps they should find an employer for whom their labor is essential.

Work for Profit or for Propaganda

In 1922 Ludwig von Mises wrote his monumental Socialism, one of the first full sociological treatments of socialism as an economic system. In his treatise, he notes that one major challenge for any system without private ownership of the means of production is the incentive problem. In socialism people are unable to work for profit or any wage with an organic link to their productivity.

Socialists took to arguing that in a communist society, people would work anyway for the mere joy of labor. Mises explains the problems of relying on the "joy of labor" as a motivating device and than explains the crux of the stimulus to labor.

It is the duty of the citizen of the socialist commonwealth to work for the community according to his powers and his ability: in return he has a claim against the community for a share in the social dividend. He who unjustifiably omits to perform his duty will be recalled to obedience by the usual methods of state coercion. The economic administration would exercise so great a power over individual citizens that it is inconceivable that anyone could permanently withstand it.

One way the Soviet state sought to mitigate the incentive problem is through propaganda. Part of its propaganda program was publishing and broadly displaying varying posters encouraging diligence in working for the state. Below are a couple of my favorites, along with their captions translated into English.

WE WILL NOT LET YOU DO A BAD JOB!

Note the seriously stern faces on those accosting the worker who looks ashamed at not giving it his all.

Here is another:

BUILD LIKE YOU WOULD FOR YOURSELF!

I cannot help noticing the blatant symbolic message: You are a worker bee in the massive Soviet Hive.