Mises Wire

How to Know if Government Is Too Big

At least since the time of Socrates, teachers have asked questions of students to elicit critical thought, evoke ideas and expose presuppositions. That has been part of my professor toolkit as well. But with the current political environment, particularly the Democratic nomination follies, reminding me of Will Rogers’s quip that “If we got one-tenth of what was promised to us … there wouldn’t be any inducement to go to heaven,” I have found that asking one of my favorite public finance (economics of government) questions has become even more important.

The question, posed after about of week of introductory material, is “How is a government that is too large be too small?” On the surface, it appears self-contradictory. But it can draw out an important conclusion about a problem infesting our politics.

The first point of the question is to get students to recognize that, to say anything useful, you must first ask, “What is the role of government?”

Once we take that step, I turn to a short but superb essay by Frédéric Bastiat — “Government” — which I have assigned. But few, if any, have yet gotten around to reading. I quote his statement that “Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.” With that as a prompt, I ask students to characterize what they see as the view of government in current politics.

By providing some guidance and referring to the cornucopia of “government should be bigger everywhere I can imagine” proposals by Democratic presidential hopefuls, I can summarize one major thread of thought as “government’s role is to give me whatever I want at someone else’s expense.”

If that is government’s role, the premise of my question is nonsense. If the answer to what we want from government is always “more,” it could never be too large. About the only way government could be too large would be if we add something on the order of “but do not make me pay for anyone else’s wish list,” because then granting your wish list (but not mine) would make me feel the government is too large. And once I have added that to the definition, students quickly conclude that government is too large in a multitude of areas that pick their pockets for others.

That conclusion then allows me to contrast the “more for me from others’ pockets” view of government all around us today with the very different view of government’s role envisioned by those whose ideas and ideals most influenced America’s founders. Consider just a few of those who were critical to that heritage if ideas.

In his 1690 Second Treatise of Government, John Locke wrote that an individual “seeks out and is willing to join in society with others … for the mutual preservation of their lives, liberties, and estates, which I call by the general name, property.”

In the 1720s, Cato’s Letters, hugely influential in our founding era, argued that “The first care which wise governors will always take is … to secure to [people] the possession of their property, upon which everything else depends… whoever violates property, or lessens or endangers it … is an enemy.”

In his 1740 Treatise of Human Nature, David Hume wrote that “No one can doubt, that the convention of the distinction of property, and for the stability of possession, is of all circumstances the most necessary to the establishment of human society, and that after the agreement for the fixing and observing of this rule, there remains little or nothing to be done toward settling a perfect harmony and concord.”

To paraphrase the reasoning of these seminal authors, the role of government is to protect all of our citizens’ property rights, which provides us our ability to choose what to do with what we own, including ourselves, so long as we don’t violate others equal property rights. And America’s founders didn’t just quietly accept those ideas, they loudly echoed them:

John Adams said that “Property is surely a right of mankind as real as liberty. … The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”

Patrick Henry said that “There are rights which no man under heaven can take from you.”

Thomas Jefferson said that “The true foundation of republican government is the equal right of every citizen in his person and property and in their management.”

James Madison said that: “The diversity of the faculties of men, from which the rights of property originate … protection of these faculties is the first object of government.”

George Washington said that “Liberty is, indeed, little else than a name where the government is too feeble to withstand the enterprises of faction … and to maintain all in the secure and tranquil enjoyment of the rights of person and property.”

This focus on the primacy of defending our property rights is reflected by what tops the list of foundational concerns for every government. National defense is to protect citizens and their property from foreigners. Police, courts, and jails are to protect citizens and their property from their neighbors’ predations. While we think of each of those functions as essential, however, we rarely recognize them as simple parts of defending every citizen’s property rights. And the source of the government’s potential to do those functions more effectively than we could do for ourselves is that by banding together in jointly defending all of our property, we can defend our property more effectively, because in that case we are less liable to be overwhelmed by others’ superior force.

Once we accept that protecting citizens and their property is the central function of government, we must ask what makes it so important. The answer is that we all gain immeasurably from the reliable performance of that function — stable, enforced property rights lower the transactions costs of voluntary, mutually-beneficial arrangements (especially complex arrangements) at almost uncountable margins of choice; they deny others (including government itself) the ability to force involuntary arrangements on others at those same margins. Increasing the former and decreasing the latter as much as possible allows us to become unimaginably more productive and better off, peacefully, without sacrificing any of our liberties.

That, then, is the real standard for judging whether government is too large or too small. And the answer to my question about the size of government is straightforward.

A government is too large to the extent it exceeds its core functions, because advancing our general welfare means using government only to do those things it does enough better than we could do it ourselves, so that we would want it to. That is a very, very small list. And anything beyond that requires more resources than government should command. Similarly, when government engages in more and more redistribution, which, since it must force millions of us to foot the bill, it clearly doesn’t do well enough we all want it to, it absorbs far more of society’s resources than are justified.

In either case, for government to acquire the additional resources to grow “too big,” requires that it involuntarily violate others’ property rights. That, in turn, means such a government is too small when it comes to defending its citizens and their property — its central function. As Ayn Rand once summarized it, “the political function of rights is precisely to protect minorities from oppression by majorities (and the smallest minority on earth is the individual).”

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