190 is too small of sample as well, but its better than 50.
And yes, as I stated in my earlier post the fact that the countries vary more than the states in other ways is a problem for using them, but the factoring your testing (difference in how intrusive government is) is far larger.
The states don't vary nearly as much in the factor we're talking about measuring even if you look at them in isolation, and the real difference is even smaller than such a look would seem to indicate since much of the taxation and regulation which people in the US face comes from the federal level and is common to all states.
No doubt about that...the Mafia runs like that.
Not at all, in fact if you want to bring the mafia in to the comparison at all (not that it really fits to well anywhere in the argument) it would be to compare the governments to it, with taxes as protection money.
Utopia would be no government at all?
No, "less government interference results in more wealth" is bounded, at the very least to enough government not to have anarchy, and I would go beyond that and say to having enough government to cover the strongest cases of clear public goods.
But the bigger governments get the less "low hanging fruit" is left, and reaching for the "upper branches" to "get the fruit" isn't cost effective. In general terms, the bigger government gets in relation to the economy the more dead weight loss is created for each additional expansion of government. That's an oversimplification, because government is not all one undifferentiated lump. Even a country with a micro government might do well to cut out some government program, and even countries with very big governments probably leave some "low hanging fruit" unpicked, but even though its a simplification its generally true. |
