Why shouldn't government be big?

Conservatives and libertarians often complain that government is "too big." Part of what they mean by this is that the government is involved in too many things, and this is detrimental to society because the government is less efficient in doing these things than the private sector.

Stated in this way, this mantra is actually an empirical claim which may be false. How do we know the government is less efficient than the private sector in everything that it does? Very often I suspect it is, but sometimes perhaps it isn't. And even if it is less efficient, the underlying principle really has not been addressed: why does the government turn out to be inefficient?

More importantly the real question is, can the solution really be for the government to simply stop doing the things it is doing? This seems like a regressive step, an admission of defeat, a blithe acceptance that maybe some problems just can't be solved. This is the kind of thinking that makes progressives' blood boil.

And rightfully so. The most aggravating thing I've found about conservatives is that often they are in fact conservative in the negative sense: they often want to call "not problems" things that are problems, and rather than optimistically seeking solutions they simply wish to be left alone. I'll be the first to complain about Obama's health care plan, but where were the conservative Republicans when they had a chance to address the problems of health care themselves? Why did they not address immigration reform? And why is it that under their watch no one spotted any of the systemic economic problems that led to the current recession? If the Left has recently had many bad ideas, the Right has simply had no ideas, which is in fact worse during times of crisis, when some idea, even a bad one, will move to fill the vacuum.

So if we're to avoid this kind of "do nothing" attitude, what are we to do about big government? Is it a problem? What exactly is the reason we are so upset by it? How do we fix that?

The problem is not at all that government is big. Any society which is advancing economically will tend to leave many important functions to large institutions, such as corporations and, yes, government. Tyler Cowen makes precisely this point in "The Paradox of Libertarianism" when he writes,

The more wealth we have, the more government we can afford. Furthermore, the better government operates, the more government people will demand. That is the fundamental paradox of libertarianism. Many initial victories bring later defeats.

But I would go even further. If liberty is what we desire, what disadvantage is there merely in the fact that government is big? The problem is not size, but the extent of coercion.

Let's take health care. Who could possibly object to the government starting a health insurance company that would provide cheaper health insurance to Americans? That seems like an admirable thing to do, and we should applaud people with power for choosing to use their power in this manner. So long as this new health insurance company operates under the same rules as any other company, no one should have any real objection to this plan. Government may very well spur other companies into greater competition, thereby increasing efficiency in the market and giving us better quality.

However, this is simply not what happens when government gets involved. The thrust of the latest health care bill is twofold: first, the government tells you what you must buy, and second, the government sells it to you. The way this issue is talked about far too often is that we have a choice between giving everyone health insurance and not giving everyone health insurance. This is an absurdity. Laws do not magically create something that isn't. If the government has a more efficient way to benefit all of us, then by all means, it should enter into the market on the same playing field as everyone else. The fact that it must use coercion to make its "solution" effective is a sign that in fact they do not have a more efficient solution, but only a determination to effect their solution even at the cost of using force.

Lets take something else, like building codes. In Chapter 16 of his book Everything I Want to Do Is Illegal, farmer Joel Salatin describes a situation in which he and his son wanted to build a small house on their farm for his son and future daughter-in-law. All told, government regulations on housing developments, from the size of the house to what kind of soil it must built on, meant that "what could have been a half-year project financed by savings and cash flow, with the work fitted neatly around the farm chores, became a monumental two-year, borrowed-money, financially-strapping endeavor that hampered production and created unnecessary tension for a long time. All because our choice of lifestyle and domicile was illegal as decreed by people who think they are more concerned about our welfare than we are."

Now, of course we all want everyone to have safe housing. By all means, then, the government should be blessed for trying to maintain codes which warn us when a house might be dangerous to live in. The question is not whether the government should do something or not. The question is whether Mr. Salatin and his son should have been forced out of building the house they wanted. So long as they trust their own abilities and are willing to accept the consequences of their own actions, why should anyone force them to abide by the government's regulatory codes? The rest of us, of course, can gladly abide by government codes if we truly think they will help us in the long run. Those of us who want the government to come help us when we are in trouble are free to agree to the terms set by the government. However, if others wish to try something different, perhaps something we ourselves would not try but may actually be more beneficial in the long run, why should we object to their willingness to experiment?

We can make similar points about any form of certification or licenses granted by the government. As Milton Friedman argued in Chapter IX of Capitalism and Freedom, it is one thing to insist that the government inspect practitioners of a certain profession, or producers of a certain good, to make sure they are living up to a certain code. It is quite another to demand that all of us purchase goods and services only from those with government certification. If I want to buy medicine that isn't approved by the FDA, and I am willing to accept the consequence of my actions, what more should the government be able to say about it? They have, after all, already done a great service to me: they have made certain that I know their opinion of the drugs I buy. That should be enough. To coerce me, however, into accepting only their opinion of the drugs offered, is inconsistent with the principle of personal freedom.

And why should government be the only institution with the right to certify things? In plenty of professions, there are private certifications which have a lot of credibility in the public. Why is it that in certain cases, the government insists that only its certification is valid, and we are not free to trust any other source of information? Again, it is not that the government is doing too much. It is only that the government is not playing by the same rules as the rest of us. By all means, let the government establish agencies here, there, and everywhere to make sure consumers are informed. But don't tell me that the only opinions that count concerning the quality of goods and services are those of bureaucrats.

To be sure, most of us will want to take the safe route and only buy what is considered safe by government inspectors. But innovation typically only comes through risk. Bold new discoveries often require doing things the rest of us are unwilling to attempt. In a free society there ought to be room for both the risk-takers and those who prefer to play it safe.

All of this discussion leads to a very important question. Why do bureaucrats have such a poor image in the popular American consciousness? Is it because they really are lazy, or stupid, or greedy, or power-hungry, or otherwise despicable people? Probably not any more than business men, or academics, or teachers, or doctors, or farmers, or anyone else. No, by nature we can expect that all people are pretty similar--far from perfect, but usually willing to make some effort at maintaining a certain level of decency. That is all any political philosophy should assume, since that is all we're ever going to find in the real world.

No, the reason bureaucrats attract such ire is not that they are despicable, but because they don't have to play by the same rules as the rest of us. They have what is formally called privilege. These days anyone with lots of wealth or some other form of advantage over others is said to have "privilege," but that is not what I mean. I mean that bureaucracies are preserved by coercive methods. They don't have to compete according to the same rules as everyone else. We are all forced to abide by their regulatory decisions, even we know for a fact there is nothing reasonable or just about those decisions.

Take away the use of coercion, however, and there isn't anything wrong with big government. Let the government run its own schools, its own hospitals, its own inspection agencies, its own health insurance companies, its own automobile industry (here I'm thinking of GM, etc.), and so on. Let those who are in power put their power to good use by trying to solve the problems of our nation. I truly am all for it. Only, don't force me to buy any of the government's goods. Don't force me to put my money in public schools; don't force me to pay for the government's health insurance; don't force me to invest invest in government automobiles; don't force me to buy only those goods which meet government code.

And now let's return to the empirical question posed at the beginning of this post. Is government necessarily less efficient? Would the private sector always give us a better result? If we follow the principle of non-coercion, the answer to this empirical question doesn't actually matter. To me it really does not matter whether a reasonable health insurance option comes from government or from private business. It does not matter whether public schools or private schools end up being the best option. It does not matter whether government licensed physicians are better than those that are not. Why doesn't it matter? Because I am free to choose which of these options I find most agreeable, and that is what makes the market more efficient.

Most conservatives and libertarians would bet on the private sector every time, but I think my point has been made. It really doesn't matter. Who cares whether government is big or not? The problem is really much more sinister than the size of government.

The problem is tyranny.