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Comment by achenet

While civil administration, police, courts, infrastructure and army all do cost, wealth, I would argue that they also help to create it.

It's a lot easier to create a software company when you live in a world where the power station cannot be held for ransom by bandits, where everyone is educated and speaks a similar language, when there are laws governing the creation of businesses, a financial system, backed by the government, which enables trade to happen easily, etc.

For example, the Roman Empire, in unifying the Mediterranean, led to a large increase in trade - you can estimate shipping volume across the Mediterranean by counting shipwrecks, and the period of ~0-150AD when the Empire was at its peak had a much higher volume of shipping than preceding and following periods.

I think of administration, police, legal and financial system as something like a capital investment - a bit like buying a widget producing machine - you spend the money/effort/resources on it because you expect to get more out of it than you put it.

parent achenet 24 days ago

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