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The Case for Small Government

The size of government is a hotly debated topic, and has been so for centuries. To simplify, “big governments” tend to take on a larger number of responsibilities, are economically interventionist, and have more power. Small or limited governments, in contrast, are less powerful and less interventionist, and maintain a stronger role for individuals and non-government (private-sector) forces. This article will outline a defense of small government, on four main grounds. First, small governments can be thought of as deontologically more moral, being less likely to violate humanity’s natural rights. Second, reducing the size of governments can be considered a precautionary measure, to keep the government from being exploited by political agents of the more nefarious kind. Third, governments are simply more incompetent in certain respects, and fourth, empirically speaking, smaller governments have managed to fuel higher levels of prosperity and growth. 

Advocacy for small government has a long history, especially within the philosophical field of liberalism. The philosopher often regarded as the founder of liberalism, John Locke, famously wrote that humans are born with three “natural rights”: to life, liberty, and property.  These rights, he wrote, were “universal, fundamental, and inalienable”; they did not depend on human laws for recognition, and could not be infringed. In this sense, Locke’s natural rights are pre-political, and any government’s fundamental duty is to protect the natural rights of humans, both because they are pre-political, and also because no government may arise without the consent of the governed. A prominent criticism of Locke’s theory of natural rights was made by the utilitarian philosopher Jeremy Bentham, who argued that natural rights could justify almost no government whatsoever. He also criticised what he saw as the theory’s aiding of the French Revolution’s brutality; he felt appeals to natural rights, ultimately, were examples of terrorist language. This criticism endured for almost two centuries after Bentham made it, and is grounded in practicality: the theory of natural rights can criticise and even destroy governments, but not create them. It imposes a criterion (close to) no government can pass. Empirically, this criticism can be countered: it was (what was considered) the violation of a group’s natural rights that led to the American Revolution; the oldest democracy today is a nation created by followers of Locke’s natural rights theory. It can also be argued that all governments today obey, to some extent, the theory of natural rights; while the consent of the governed may not be explicit, it is certainly tacit. In most modern democracies, governments that form do so after being voted in- meaning governments only gain power after being given it by a populace that consents, by voting, to being governed. The protection of civil liberties and basic freedoms (such as those of speech, assembly, and religion) are also often considered givens, with any form of authoritarianism or despotism being heavily criticised (with close to no exceptions). 

Drawing on Locke’s theories, a more recent defense of limited government was crafted by the political philosopher Robert Nozick. Nozick opined that the only morally permissible state was a state that restricted its responsibilities to the protection of those natural rights. A criticism of this revolves around corporate or oligarchal greed: so minimal a state would allow the free market to be dominated by corporate greed, allowing monopolies to form, which would be antithetical to the preservation of natural rights. The main counterargument to this criticism revolves around how monopolies cannot form without the help of an interventionist or collusive government; the East India Company, for instance, would not have become a armed monopoly had it not received extensive support from the British Government, and a truly free market would not (necessarily) protect big business; an example is how several bulge-bracket banks in 2007 only did not collapse thanks to government bailouts (the free market would have let them collapse; government intervention kept them up). 

Nozick opposed all forms of anarchism- on the grounds that anarchy could all too easily lead to what Locke called the state of nature- an arbitrary state in which laws had to be personally enforced. This would lead to each individual legislating natural law independently, and a resulting lack of standardisation and the potential for self-justified tyranny: in the state of nature, murdering a supposed criminal for theft would be permissible, since there is no government to fairly legislate natural law. Since everybody in the state of nature may legislate natural law as they please, a self-justification of tyranny would become all-too-easy. On these grounds, he argued that any anarchist society would lead to at least a minimal state being formed organically. However, no state beyond the minimal state- a state that did nothing more than protect its people from force and theft, and enforced contracts- could be moral, for states taking on more power would lead to a slippery slope: humans’ natural rights would be vulnerable. Since a government maintains a monopoly on force, it is effectively free to do as it pleases, and only a minimal state can be kept in check by its people. A large state could all too easily assume tyrannical powers for nebulous or overblown reasons; the most prominent examples of this are dictatorships using political instability as an excuse to assume dictatorial powers (which happened in Germany in 1933, when the Enabling Act was passed, and in Korea in 1971, when the Yushin Constitution was adopted). Nozick’s defense of small government is deontological (not consequentialist); a small state is the only moral state, since larger states could all too easily slip into authoritarianism, and so are unacceptable, since the natural rights of human beings cannot be violated under any circumstance. 

 A second defense of small government is more commonsensical, and cautionary: governments change, especially in democracies. A large state could end up becoming a dangerously powerful tool ripe for manipulation by politically-savvy rabble-rousers. As the saying goes, power corrupts, and absolute power corrupts absolutely; this axiom applies to governments, too. A government with too much power would risk corrupting itself, especially if it came under the control of a populist or demagogue elected to office (which has happened before; an extreme example would be Adolf Hitler, a more recent one Donald Trump). A small government would keep such characters from being able to negatively influence nations; limit the size of government and it can do less damage. A small government can therefore also be thought of as a precaution; escaping the effects of government wrongdoing- which can be frequent, and substantial- is nigh-impossible, and so a small government would render itself incapable of doing too much damage. Therefore, an ideal government must remain constrained. 

A third argument for small government revolves around the contrasting capabilities of governments and individuals: there are things the government simply does not do as well. To take the example of automobiles, privately-manufactured West German BMWs and Volkswagens were more widely owned, relatively more affordable, and better-performing than publicly-manufactured East German Trabants. To take a second example, that of education, a study commissioned by the UNDP found that within the field of education, and especially in lower or middle-income nations, private schools tended to be more efficient and better providers of education that state-governed alternatives. The reason, in significant part, lies in how the public sector rarely has to pay for failure or inefficient; in the private sector, companies’ feet are held to the fire; they must do a good job of providing services, or risk going out of business. In contrast, public-sector providers face no penalty for inefficiency; failure is not risky, and financial losses can simply be covered with taxpayer money. As a result, the private sector is often more efficient, because it is forced to be. Admittedly, this is not a universal phenomenon; there are examples of industries in which public provision of services is often better or higher-quality (such as healthcare, especially in developed nations). However, it can safely be said that there are some disciplines the government simply cannot handle as well as the private sector. It would therefore make sense to restrict the government’s role to doing only what it can do better than the private sector or individuals.  

A last defense of small government is consequentialist: small governments often work better. A 2003 study, conducted by the European Central Bank and authored by economists Antonio Afonso, Ludger Schuknecht, and Vito Tanzi tried to “provide a proxy for measuring public sector performance and efficiency”. It did this by measuring a number of “opportunity indicators”, such as corruption, red tape, secondary school enrolment, and life expectancy, and also a number of “Standard Musgravian indicators”, such as inequality, inflation, GDP per capita, and unemployment. The conclusion the paper arrived at is telling: the paper found “moderate differences” in the performance indicators of public sectors across industrialised countries, and the “best” economic performance was reported by countries with small public sectors and small governments (defined as governments with public sector spending amounting to 40% of the GDP or less). This is not an isolated phenomenon; to take a second example, the development of Hong Kong can be traced almost entirely to the philosophy of positive non-interventionism, developed by Sir John Cowperthwaite, Hong Kong’s former Financial Secretary. When Cowperthwaite was made Financial Secretary in 1961, Hong Kong was a poor backwater; by the 1990s, the average Hong Konger was wealthier than the average British citizen. Cowperthwaite’ s free-market reforms are widely credited with turning Hong Kong into the nation with what is currently the fourth-highest HDI in existence; former Chief Executive Donald Tsang, while in office, stressed Hong Kong’s commitment to a small government and a big market, saying the philosophy of positive non-interventionism underscored the economic freedom that powered Hong Kong’s prosperity. A third example is that of Georgia; previously one of the world’s most corrupt nations, it began to prosper massively thanks to President Mikheil Saakashvili’s reforms, which took place between 2004 and 2013. In 2009, he introduced the Economic Liberty Act of Georgia, which restricted the government’s ability to interfere in the economy; it also restricted how much the government was allowed to spend, and aimed to reduce public debt. The result was Georgia’s economy experiencing a growth of 70% between 2003 and 2013, and the tripling of the country’s per capita income, all without triggering an increase in inequality. Empirically, small governments have proven themselves capable of acting as drivers of prosperity, economic development, and growth, and it can therefore be concluded that there is a case to be made in favour of reducing the size of governments.

Paritosh Purohit

Paritosh Purohit is a first-year undergraduate planning on majoring in economics. His interests include diplomatic history, law, economics, political ideologies, and philosophy.

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