Economics

The Anti-Government Straw Man

Last week, Congressman Paul Ryan and I published an op-ed in the Wall Street Journal entitled “The Size of Government and the Choice This Fall.” The article argues that Americans must make a choice in favor of their traditional free enterprise system or else they will lose it. Why? Because otherwise the choice will be made for them—a rejection of free enterprise and an embrace of big government, not in one fell swoop but  one seemingly small, creeping government expansion at a time.

Our Journal piece ends with this: “Every day, more see that the road to serfdom in America does not involve a knock in the night or a jack-booted thug. It starts with smooth-talking politicians offering seemingly innocuous compromises, and an opportunistic leadership that chooses not to stand up for America’s enduring principles of freedom and entrepreneurship.”

The article provoked a great deal of reaction. The most notable was from our friend David Brooks over at the New York Times, who objected to our thesis this way: “If the current Republican Party regards every new bit of government action as a step on the road to serfdom, then the party will be taking this long, mainstream American tradition and exiling it from the G.O.P.”

David is one of the most thoughtful commentators writing today, and he has many fans here at AEI (me among them). When David objects to your thinking, you need to take it seriously. The volley started an interesting and constructive conversation among several stars in the blogosphere, including Charles Murray, Pete Wehner, and a number of others.

Let me add a couple of ideas to the debate. First, I resist the conflation of the free enterprise agenda with the GOP. I would like to see the free enterprise culture embodied in the philosophy of both parties. Sadly, I see a lot of statist impulses on both sides of the aisle.

A bigger issue is what I see as a straw man argument emerging—the idea that what people like Paul Ryan and me really want today is zero government. This is not so. In our WSJ piece, we write, “Even Friedrich Hayek, in his famous book, The Road to Serfdom, reminded us that the state has legitimate—and critical—functions, from rectifying market failures to securing some minimum standard of living.”

Congressman Ryan reacted to David’s column with examples of good government action from his “Roadmap for America’s Future,” which would meet our needs while still respecting our free enterprise culture. I’ll be slightly more academic here, and simply contrast what the government should do with what the government is doing—the things that frankly are driving Americans crazy, and leading a majority to say they believe the government itself is our nation’s greatest threat.

When we say that the government should concern itself with market failures, we are obviously acknowledging that markets are not perfect. Market failures can occur when we have monopolies, externalities (like pollution), public goods (fire protection, for example), and information problems (such as when people cheat others in the marketplace). Nearly all economists agree that these kinds of failures can justify some degree of state intervention. Furthermore, it is legitimate (in our view) for society to provide some minimum basic standard of living for all, and government has a role to play in that process.

What we do object to is when government so manifestly moves beyond these basic roles. And that is what is happening now. From “Cash-for-Clunkers” to the GM and Chrysler bailouts, our government is incurring trillions of dollars of new debt and enacting heavy-handed regulation on the business enterprises that could otherwise provide the way out of our current woes (and provide the taxes that make government programs possible in the first place). The truth is that current government actions are not correcting market failures. Rather, they are short-circuiting markets.

This is what we—and about 70 percent of Americans—find unacceptable. We see a government that has gone on a drunken binge largely directed toward rewarding political friends (like public-sector unions), social engineering (see ObamaCare’s mandates), and good old-fashioned pork (drop the needle almost anywhere in the stimulus).

Congressman Ryan and I are not anti-government. On the contrary, we are looking for ways to stop the rapidly expanding state from destroying its own legitimacy.

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