Does the government have a role to play in Americans’ lives? If you ask a libertarian or Tea Party activist, the answer would be a resounding no. The Tea Party rode to Washington in the 2010 midterms on a staunch pro-liberty, anti-government platform, and these days, it seems that citizen backlash against Washington – whether from Occupy Wall Street protesters or Tea Party activists – has never been higher. On everything from education to the environment, the GOP candidates have been candid in their desire to reduce the size of government and let the free market reign.
It’s hard to debate a topic as big as government, because so many examples are deemed inconclusive by either side. Libertarians claim that all apparent market failures are really government failures and liberals scream that all apparent government failures are just examples of big industry paying for government to privilege its interests. Nonetheless, I’m going to try and offer three reasons that government should take on duties beyond the minimal ones that libertarians allow for it.
1. Markets can fail to be efficient. Negative externalities like pollution and smoking and positive externalities like those that accrue to a healthy populace (public health) mean that we need a government to tax and subsidize some activities in order to get the most welfare for our dollar. Also, information asymmetries (healthcare, auto mechanics) and prisoners dilemmas (insurance pools, “moral hazard”) mean that governments can help keep markets running smoothly and efficiently, but they must be able and willing to pass smart regulation to do that. In a complex society, it may turn out that many activities mirror these market failures. Maybe not, but we should be open to regulation when we think we’ve identified one of these characteristic market ailments.
2. Markets, even when they succeed at being efficient, can do wrong. The market’s goal, if it can be said to have a goal at all, is efficiency -- the creation of the most welfare from a given amount of resources. Efficiency should not be scoffed at; I think its a genuine moral value. It’s not however, the only morally laudable goal, as sometimes creating the largest pie conflicts with making sure some people have enough or that people get what they deserve. For example, people once traded slaves, but as libertarians are quick to point out, that type of market was wrong because it offended against human dignity (people cannot sell their own autonomy). But if a slave market is one that we cannot tolerate on moral grounds, then there may be other markets we cannot tolerate on moral grounds, such as one in which some people do not have adequate healthcare. Government is one way we can acknowledge other moral values beyond efficiency.
3. Human fallibility. I’ve found many libertarians to be hostile to the idea of the “social role” that private enterprise foists on its participants. I admit that I’ve found this idea to be abused by many on the left, but I find it convincing when stripped of the jargon that goes with it. Simply put, the social position that people are put in influences how they weigh costs and benefits and lead to mistakes in that weighing. This is not an amorphous point, but one affirmed by psychological studies again and again. Private enterprise, rightly, focuses on private benefit, but this sometimes distorts perceptions of risk. Public servants on the other hand see things differently because they are charged with the public good and must face the public in hearings and at election time. Firms like Blackwater never have to answer to public scrutiny until it’s too late, and bubbles of various types (throughout history, not just the most recent) result from people getting “caught up” in the private viewpoint and only seeing a chance for more profit when public minded people see risky speculation.
Don’t get me wrong, I’ll be the first one to admit that our government has a host of flaws. Yes, it’s too big and bureaucratic. Yes, there are countless examples of mismanagement and waste. And yes, the housing crisis and financial meltdown are great examples of how government oversight and regulation needs to be tightened. But fundamentally, I believe the government is still a net positive.
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