Will Wilkinson has written a post that clarifies a number of issues in our ongoing conversation about the size of government:

Here’s a thought experiment I’ve found useful in the past. Imagine a government that does just two things. First, it automatically deducts 100% from everyone’s wages. Second, it sends everyone a check for the same amount (minus the cost of doing all this divided by the size of the working population, if you’re a pedant). That’s one big government! And it has no effect whatsoever on your life. Now, suppose the government takes 50% of everyone’s income, and then sends everyone vouchers for groceries, rent, gas, and so forth at precisely the amounts they would have spent anyway. Now compare it to a government that takes 50% of everyone’s income and burns it (or converts it to zero entries in a database, if you’re a pedant). These two governments are the same size, but what does that tell you? Now imagine a government that has a low 10% flat income tax, the revenue from which finances, on the one hand, deftly administered, growth-conducive public goods and, on the other hand, a muscular authoritarian police state that enforces strict restrictions on every liberty you prize. Small government! But not so desirable.
In reality, Americans get a mix of all this from their government. We get some totally legit public goods. We get certain goods and services, generally at a reduced level of quality, that some people would have paid for anyway but others can’t afford. We get a lot of straight-up destruction of wealth and welfare from deadweight loss, negative-sum transfers, and stupid wars. We get a lamentable amount of authoritarian police state infrastructure and activity. If we could cut in half the percentage of the budget dedicated to stupid wars and Gestapo stuff, I’d happily accept a permanent 5% increase in the size of government devoted entirely to digging vast holes and filling them in. Freedom isn’t free!

Though I’m sure Will and I disagree on a number of particulars, this strikes me as a useful framework. I’d also add that off-balance-sheet vehicles and the power to regulate are an important dimension of governmental authority that we miss if we focus exclusively on explicit spending.

I’d also love for you to read Will’s post on the premium we place on meaningful, engaging work, and how it might shape the labor market in a more affluent society. He touches on a number of issues that are of great interest to me, and I intend to write more on this subject:

David Ellerman, one of my favourite challenging thinkers, argues that the employer-employee relationship is more like the master-slave relationship than we are inclined to believe. I know this sounds a little crazy, and I don’t entirely buy his argument. But take a look; he’s on to something. Philosophical questions of self-ownership and the alienability of labour aside, I am convinced that autonomy is profoundly important to most of us, and that the sort of self-rental involved in the employment relation is regularly experienced as a lamentable loss of autonomy, if not humiliating subjection. I think a lot of us would rather not work for somebody else. It’s not necessarily that we’re burgeoning entrepreneurs eager to start small businesses. It just sucks to have a boss. And I think many young people are staying in college or heading to grad school not so much to improve their job prospects later, but to postpone entering into an arrangement in which “enough money is made out of you to buy an automobile for some other fellow’s son”, in F. Scott Fitzgerald’s words.

I recently a wrote a column that scratched the surface of some of these issues.