Use "Venture Buyers" to Show the Hidden Dangers of Government Spending - The Advocates for Self-Government
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Use “Venture Buyers” to Show the Hidden Dangers of Government Spending

Use “Venture Buyers” to Show the Hidden Dangers of Government Spending

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You’re probably familiar with venture capitalists. But what about “venture buyers”?

I encountered that term this week in an excellent short article entitled “Federal Spending: Now for the Really Bad News” by Forbes Political Economy Editor John Tamny.

“Venture buyers” is a nifty phrase and concept that can be very helpful when you’re trying to persuade skeptics that government spending has terrible consequences.

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In his article Tamny points out that government spending is not just ridiculously wasteful, bad as that is. It also deprives the people who earned that money of the ability to spend it themselves, on the things they consider most important. And this not only deprives them, it harms the rest of us — in unexpected ways.
One of those ways is that “venture buyers” don’t get to spend their money on new, innovative, risky, expensive and important items.
What are “venture buyers?”

“We sometimes hear them described as ‘first adopters,” Tamny explains. “These are the people with the means to experiment on what is new, frequently expensive, and possibly even life-threatening. Their buying habits tell businesses what consumers want, how they want it, and [by] doing that signal to entrepreneurs where the profits will be if they can turn what is frequently a rare luxury into a common good. But with government so aggressively spending the resources we’ve created… there’s much less ‘easy money’ in our pockets that would reveal our preferences for what is [currently] expensive and largely unknown.”

Venture buyers, then, are the people who are the first to buy new, promising, risky and costly goods and services, try them out, and bring them to the attention of the rest of us. As we watch them using and playing with their new products and toys and benefiting from exciting new services, the rest of us start clamoring for them as well. And businesses are motivated to discover how to quickly lower prices so the rest of us can enjoy them, too.
Venture buyers thus play a huge role in bringing life-changing new products and services to
society.

Think of all the things we commonly use today that began life as expensive and/or startlingly different products only used by those on the bleeding edge. Cars were once crazily expensive and dangerous, as were airplanes. Portable phones were luxuries for the rich. Home computers, VHS players, fax machines, Uber, Airbnb… it’s an endless list.

And an important note: it’s not just fun and seemingly frivolous products that venture buyers popularize. Take health and medicine.

Writes Tamny:

” [C]onsider the health implications of our free spending government. … Thinking about cancer, how much experimentation has never taken place over the last 80 years thanks to government spending having greatly shrunk the total availability of resources necessary for it? Was a cure (or many cures) lost as politicians falsely promised growth through spending on the proverbial bridges, grants, and yes, medical studies to nowhere?”

The more government spends, the less venture buyers have to spend. And that means far less experimenting with new and innovative products and services — including critical and life-saving ones. And that in turn means businesses and entrepreneurs receive far less information about society’s greatest needs and desires — and the best ways to fulfill them.

Of course, we never see the inventions, the cures, the innovations, the services that don’t come into being. We don’t know what we are missing. But we can understand that we are far poorer because of it.

This is a powerful and persuasive indictment of government spending. (There are many others, of course.) I love the catchy, intriguing phrase “venture buyers” and how using it helps explain the little-understood but crucial role early adopters play in raising living standards for everyone.
Share it, and open minds to overlooked dangers of massive government spending.

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