Niklas Luhmann's Theory of Politics and Law Quotes

“As a central distributor of goods, the welfare state necessitates high levels of taxation, and it must institute extensive programmes of economic regulation in order to ensure that sufficient tax revenue is generated. Excessive taxation, consequently, always occurs where the political system inadequately manages its ‘opening and restriction’ towards the economy, and where it assumes co-ordinating power in influencing the economic conditions in which citizens live. High-level taxation, however, inevitably leads to economic problems – to problems registered in the medium of money, but caused by the medium of power. These problems might, for instance, take the form of possible underproduction, flight of capital, loss of investment potential, or increasing prices, imbalances in the relation of supply and demand in the private economy, difficulties in the circulation of capital, worsening international competitiveness of firms, or excessive regulation of available capital by central banks. All such tendencies, in Luhmann’s view, characterize societies which are drifting away from the ideal condition of realized plural differentiation towards a more authoritarian (less differentiated) mode of political economy.”
― Chris Thornhill, Niklas Luhmann's Theory of Politics and Law