Big government is a part of capitalism

Juan Salamanca/Contributing Writer

 

Grover Norquist, an American political activist, famously remarked that the size of government ought to be small enough for one to be able to “drag it into the bathroom and drown it in the bathtub.”

This view is attractive to the free marketeers who like their politics with a healthy fear of the state. Government intervention in the economy is inefficient, coercive and, worst of all, it rewards the lazy while punishing the industrious. Thus, the argument goes, government ought to exist solely to enforce contracts and defend the country. In the Tea Party narrative, big government is the villain that must be defeated at all costs.

It sounds nice; make the government small and let the free market decide!

It’s not that simple. This view of government is fundamentally incoherent. Not only does the market require a robust government to exist, but the increasing complexity and demands of the economy means the government must grow.

The size of the United States Federal Government today was not inflated as a result of nefarious bureaucrats seeking power but rather the result of well over a century of American society responding to new economic conditions.

To understand why, we must begin with a basic definition of capitalism; an economic system where trade and industry are controlled by individuals through private property.

Property must be private. The owner must have exclusive right to it, even if it’s not in their physical possession. This is fundamental to capitalism. Without it, a business owner could not make decisions about their business at will nor could they trade their property.

The first apparent issue with this is the question of enforcement. Suppose you claim to own multiple houses. When you are physically present in one of those houses, you can kick anyone out who you don’t want coming in. Yet, how can you ensure that your other houses remain yours in the absence of your physical presence? After all, if you’re not there, there’s nothing to stop me from breaking into one of your houses and sleeping in your bed.

There are two “free market” solutions to this problem.

The first is to defend the property, known as the anarcho-capitalist solution: hire guards to ensure that what is yours remains yours. This poses several immediate problems, the most pressing of which is how do you ensure that the guards will remain loyal to you without simply taking over the house for their own? “You pay them!” responds the clever libertarian. Yet surely the wage you pay is worth a fraction of the value of the houses and the return on investment you get on them, otherwise you wouldn’t be able to afford to pay your guards. An enterprising rogue guard picks taking over the house every single time.

Worse still, if I can out-fight the guards and I really wanted the house, there’s not much to stop me and not much you can do about it. Perhaps a counter-attack, but we don’t want that much bloodshed whenever there are property disputes.  Nor do we want property exclusively for those who can afford the toughest muscle and the biggest guns, so that won’t work.

The second solution is a contract: we agree that a house is yours. Yet contracts are worth as much as the paper they’re written on if there’s no authority behind it. If I have a gun and I want your house, your deed is as good as toilet paper. Even if we respect the contract’s authority, who provides remedies when it is violated? There must be a third-party to enforce those contracts; the government.

It’s important to note that there is no private-sector version of this function. A government has the coercive authority necessary to carry it out where a private actor does not. Ironically, it is this coercive authority that ensures people remain independent of private property owners. In a public space, a person is free to exercise freedoms granted by the government or by nature in a liberal point of view. Absent that, people would be at the mercy of whoever owns the ground beneath their feet, as property owners are sovereign over what is theirs.

You might respond that if you don’t like the rules of a person’s property you can just leave. But what if all the possible property has been bought up? Are you more free in a “free” market where your freedom is limited to a choice between which private dictator you want to live under? I don’t think so.

What does contract enforcement entail? Strength over private actors — authority — and the ability to review contracts. The latter is a necessary layer of bureaucracy, otherwise the government wouldn’t be able to know which contracts are legitimate.

Ok, that’s not so bad, those are the only two real functions the government needs to fill, right? Not so fast. The argument has a massive hole regarding the size of a “limited” government.

Industrialization has heralded a new age of science and technology upon humanity. With every decade comes a new type of firm dealing in products not seen in years previous. These firms deal with each other; a Boeing airplane isn’t built with parts purely made by Boeing, they outsource the manufacturing of many of their designs to other firms.

Think of the complexity of an airplane. To be able to fully-comprehend its design, an interdisciplinary understanding of science is required. This is just one example of complex tech assembled over a complex network of firms. Everything from cellphones to satellites are manufactured in this way. The implication of this is that contracts between firms get increasingly specialized.

It’s the job of the government to interpret and enforce contracts between any two firms. If it wanted to enforce contracts between two biomed firms for instance, it would require specialized knowledge to ensure that the contract is enforced fairly and effectively. This means a whole tree of bureaucratic organizations that sprout from the contract root.

You can’t expect a single enforcement agency to have the knowledge necessary to enforce contracts in a world where firms deal in anything from amazonian taproots, to sex toys, to mirrors for space telescopes. Multiple specialized agencies are required and the size of the government balloons.

Another market issue is jurisdiction. A market is created by a set of rules. The government carries out the function of deciding who can participate in a market and what can be sold in a market. For example, can a person sell themselves into slavery? Can parents sell their children as property? Is a comatose person a market participant? Deciding these questions requires another layer of government bureaucracy because disagreement on them could lead to conflict.

We haven’t even gotten to defense. If American conservatives are to be believed, any less than current military spending levels is an existential threat to American security. Is there any government agency more coercive, expensive and expansive than the military? Does security outweigh liberty? If it does, then why limit the government under any circumstance? Even the libertarian who wants to cut defense spending surely concedes that the military must be at least powerful enough to defend a country’s borders.

The moral of the story is that no “small government” remains small for very long. In my view, the real purpose behind the “big government” complaint is to carefully couch brutal austerity in moralistic rhetoric. Frankly, “take away benefits to society’s most vulnerable so that we rich people can pay less in taxes” doesn’t make for an inspiring conservative slogan like an old fashioned appeal to freedom does.

 

Disclaimer:

The opinions presented within this page do not represent the views of FIU Student Media Editorial Board. These views are separate from editorials and reflect individual perspectives of contributing writers and/or members of the University community.

 

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