If you create an artificial scarcity through public policy, artificial rent so to speak - setting up a new import quota or giving out a particular office that is very beneficial - people are going to invest money, time and resources in trying to secure that opportunity. If the value is created independently of the search for it, the search for it is wasted.

You can get a coalition of senators from particular states in America, for example, who want to construct highways or dams or ports which may well be very inefficient. The taxes would be paid by the people over the whole country, but the benefits would go to the few people in those particular locations. This type of spending is a rather gross waste of resources that worsened over the years as the government has been allowed to do more particularized things.

If you are going to spend for one group, you have to spend the same for every group, just like if you tax one group you have to tax everybody. You have to go back to having more general laws, more general taxes and more general spending programs.

Politics is a romantic search for the good and the true and the beautiful.

The assumption that we can keep societies open and free to everybody is going to have to stop. We are going to have to recognize that some people simply are not qualified and do not want to belong a civil order. Until we begin to make discrimination along those lines, then I think we are going to be extremely vulnerable.

Clearly, I am not an anarchist. Philosophically, I might be, but I think in practical terms.

I have long been in favor of a balanced budget restriction at the level of the federal government of the United States. Because the federal government has money-creating powers it can, in fact, be very damaging if it runs a series of budget deficits. With the state government in the United States, they don't have money-creating powers. The automatic discipline imposed by the fact that they are in a common monetary unit and don't have control over the money power means that the balanced budget restriction is less needed.