Government Does a Lot, But Should It?

“You didn’t do that.”

Pundits like me have had a field day with that one. Perhaps we should all write thank-you notes to the President. You just don’t get a jewel like that every day. Predictably, the Left has responded with a litany of reasons we should be grateful for all the things our government has brought us, including sliced bread, shirt pockets, and the Internet. There is little doubt that the government has been involved in any number of technological advances over the years. The question is whether it should be involved.

When government acts to protect individuals from force or fraud perpetrated by others, it is acting in consonance with its proper purpose–the preservation of individual rights. When it strays beyond those bounds by interfering in the economy, it is encroaching upon individual rights itself and must be challenged.

The first defense of this view is moral. I believe that it is wrong to take from others that which they have created. When a thief takes from an individual, there is little argument about whether the act was morally defensible. It is not. When government takes from an individual, we have to ask ourselves whether such taking is required to preserve individual liberty.

For example, taxation to support protection of the nation’s borders from foreign invasion is arguably justified. (Anarchists disagree. I am not an anarchist.) Likewise, some form of law enforcement and a court system is required. (Much as I love the private sector, I am dubious that justice can be served by scores of private independent police forces and courts.) Beyond that, there is little government needs to do to guarantee the liberty of its citizens.

Government-subsidized fly swatter

At one time, this ideal lay at the core of American politics. The Founders, just as we do today, often disagreed about the proper extent of governmental power. George Washington suppressed the Whiskey Rebellion against taxes levied by the new nation, though he had led a violent revolution himself against the British Crown. Alexander Hamilton favored a strong central government, while Jefferson and Madison did not. The difference between their disagreements and ours is that theirs were firmly anchored to the principles of individual liberty and a stringently limited government. We are no longer so tethered. Today, we drift aimlessly under the shadow of a power-hungry, intrusive behemoth. Our disagreements are about which of the Leviathan’s toenails to trim, not whether it should be clubbed into submission.

The second defense of limited government is practical: government simply does not do anything very well beyond these tightly limited functions. No one who has studied the federal budget process can fail to marvel at the sheer audacity of its assumptions and the dismal results that follow. “Cutting” a budget means increasing it by less (no, I did not make this up). Provisions are rarely made to end a program once its purpose has been accomplished. Agencies that blow a wad of money at the end of the fiscal year are likely to get more the next year than frugal ones (such few that exist).

In my view, the moral argument carries more weight. I would happily live under a truly free economy even if it meant living less well materially. Fortunately the moral is the practical in this case. Free markets also result in more prosperity. I can have my cake and eat it too. So can you.

New technologies are developed by people who risk guessing what the future will hold. For every smashing success there are a hundred grinding failures. The market rewards the successes and punishes the failures, resulting in better, cheaper, and more reliable products. The people who invest in start ups and the companies that invest in innovations are much more likely to get it right because their dough is on the line. When government gets it wrong (think Solyndra), you and I pay, not the whiz kids in government who thought the investment was a good idea. They rarely get it right because they don’t need to get it right.

This is why the argument that government is a benevolent force that invents things like the Internet is rubbish. No one can make investments more wisely than a free market because no one person or committee can know all the factors that determine whether a new product or a start up will be successful. Government can only allocate resources by force, thus distorting market processes to the detriment of all except bureaucrats and subsidy recipients.

Which brings us back to the moral argument. Government can only promote some things by squelching others. The public-sector subsidy for developing an electric car or solar panels means less money for investors in the private sector to fund other things, things people actually want. Taking that money is immoral, 1) because it represents the taking of another’s wealth by force without justification (see above), and 2) it precludes people from enjoying the private-sector benefits that they could enjoy were it not for that taking.

Government benefits us through its “investments” in the same sense that a stopped clock is right twice a day. Once in a while, it will stumble upon something useful and fund it. Untempered by failure, though, there is no mechanism through which it can learn to find such things efficiently and fund them wisely. The market disciplines the rest of us harshly. The government stays busy avoiding such lessons by forcing us to pick up the tab for its failures. We have no real choice in the matter.

A world in which free people engaged in free enterprise are the norm is a world that reflects what people really want. You can bet that opponents of such a system want to tell you and me how to spend and not spend our money, from sugar to solar power. Indignation over another’s choices is an obnoxious and destructive form of paternalism. Indignation backed by force is tyranny.

About Terry Noel

I am an Associate Professor of Management and Quantitative Methods at Illinois State University. My specialty is entrepreneurship.
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7 Responses to Government Does a Lot, But Should It?

  1. David Marx says:

    Terry, you and I are in total agreement on these matters. Well written piece. Thanks. It’s too bad that most people in the federal government do not agree with us. Gone of the days of elected representatives that viewed themselves as public servants and not career politicians.


  2. Dick Richards says:

    Amen, brother!


  3. Pat Quinn says:

    Those who cannot do…………….run for office.


  4. CITYWATCH says:

    Redistribution of everything. I’m tired of the theft.


  5. Government’s solutions are as bad as the problems. In most cases, the problems are worse because of government.


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