What Should the Government be Doing?
Milton Friedman famously remarked that if the government were put in charge of the Sahara, there would soon be a shortage of sand. It is a remark that delighted both the libertarian and neoclassical economists. It is likely that Friedman repeated this remark at many a seminar. To do so, he had to leave his home, one built according to strict building codes and protected by the socialized services of the city police and fire departments, travel over socialized roads and freeways to a government-sponsored and -regulated airport, board an airplane after it had been thoroughly vetted by a government-supervised inspector, go to a college or university which was heavily supported by the government, and later that evening, no doubt, he discussed his witticism with friends and colleagues over dinner at a restaurant that had to meet strict government standards for cleanliness. And all of this took place under the protection of a military establishment which involves considerable expense to the government and its citizens.
It would seem, then, that the government does indeed do many things tolerably well. It may be, as Friedman claimed, that most of these services could be provided by the private market. And while that might be true, and in some cases must be true, it is equally true that while many egregious examples of inefficiency can be found, the government provides many services tolerably well and with as much efficiency as can be found in any large bureaucracy, public or private. Nevertheless, the point of Friedman's remark is still valid: What should government be doing, and at what level should it be doing it? Conservatives leave little room for government and socialists leave little room for anything else. Neither provides us with a set of principles by which we can evaluate the proper role of government.
Man is a social animal; he needs government. We are born into the little ready-made communities called “families” ruled in various ways by parents. We organize ourselves into social and political hierarchies as naturally as we breathe, and we need government to fulfill our natural ends and goals. But while government in theory may be natural, any actual government may not fulfill the natural ends and goals of man—and most don't. The modern nation-state becomes an end in itself, and the citizen a mere client. We need some set of principles by which to distinguish good government from bad, and the “all or nothing” arguments of socialists and conservatives are not really helpful Until we decide on the proper role of government, we cannot possibly talk about the proper level and kind of taxation that is required to support the government.
Associated with the question of what the government should be doing is the question of at what level the government should be doing it. During the last election campaign, Senator Joe Biden boasted that he had sponsored legislation which had placed 11,000 cops on the beat in our cities. But while his boast is likely true, it is somewhat frightening; a problem that we would normally take to our local mayor and city council is resolved at the highest level of government. Every local problem becomes a federal case, and the government farthest from the actual situation becomes the guarantor of the cop on the beat, the teacher in the classroom, and every other aspect of our social lives that is normally resolved by local action.
“Starving the Beast”
The question of the proper role and level of government has become a difficult one because each new government expenditure creates a constituency ready to fight for the expansion of the role of government and especially for the expansion of their particular subsidy. Thus addressing the question at a practical level involves battling a thousand constituencies each with a hundred lobbyists and millions in campaign contributions or promises of lucrative jobs when the legislator retires from public work. These special interests easily combine to defeat any serious attempt at budget and government reform.
Recognizing this problem, the Reagan administration abandoned the question of the proper role of government and opted for a strategy of “starving the beast,” that is, cutting taxes and thereby cutting off the air supply to big government. The resulting super-deficits would force a confrontation over the issue of government spending. Alas, the strategy did not work. The “beast's” diet was merely changed from cash to credit, and it turns out that credit is easier to spend than cash. The government did not shrink, but grew, and grew at an alarming rate. The budget deficit tripled under Reagan-Bush XLI (from $700 million to $2.1 trillion), more than doubled again under Clinton (to over $5 trillion), and more than doubled again under Bush (to nearly $11 trillion). What is really troublesome about the deficit, however, is not the absolute number itself, but the size of the interest payments, which now amount to about half-a-trillion dollars each year. This works out to about $1,500 per person, or $6,000 for a family of four. This means that the first $6,000 of each family's taxes goes to financing the past, with nothing for the present or the future. Sooner or later, the past must overwhelm the present and foreclose the future. Then the beast will indeed be starved, but so will the rest of us. Financing the present by mortgaging the future is not only bad economics, it is bad morals; we pay for our profligacy by burdening our children, thereby reversing the natural order of family and national life.
But the Reagan administration had another reason for their “starve the beast” strategy: they really had no philosophy of governance. They only knew that they wanted “less government,” but they were not quite clear on what that meant in practice. By and large, they were followers of Friedrich Hayek, the Austrian economist. The Austrians limit the role of government to “protecting property,” but they are vague as to what that actually means. Indeed, they are vague about what “property” means, since this is a term that has had many definitions over the course of the centuries. Nor could they give clear reasons why this should be the only function of government; after all, if everything is to be privatized, why not privatize this function as well, and leave property to those who can protect it from their own resources? Hayek himself equivocated on the issue of government, allowing that it could provide basic incomes and health care, handle externalities of the market, and other functions as well. In the end, Hayek ended up refusing the question of the proper role of government and hence could give no clear guidance to his acolytes in the Reagan administration. In practice, Austrian economics proved to be a faster road to socialism than the socialists themselves could build, but it was mainly a socialism for the rich. Since it is a woefully incomplete theory, its unintended consequences overwhelm its theoretical bases with the result that Austrian theory leads to socialist practice, which is exactly the result that Hilaire Belloc predicted for such theories in his book, The Servile State.
Until we answer the question about government, we cannot answer the question about taxes; unless we know what the government ought to do, we cannot know how much it ought to cost or how to fund it. And we cannot know what it ought to do without first knowing what purpose government has and upon what principles it rests.
The Purpose of Government
Human beings are not self-sufficient as individuals. We are born naked against the elements and helpless in ourselves; we are dependent from the beginning on others, and apart from them we would not last our first day on earth. This dependency continues throughout our lives, since none of us can or should acquire all the skills necessary to grow our own food, make our own shoes, provide our own education, etc. We are by nature social beings and thrive only in community. The purpose of government is to provide the conditions under which all the other communities that make up the social fabric can flourish. And first and foremost among these other communities is the primary community of the family, the one that first calls us into being through an act of love and gives us the gifts that will form us. Not only the material gifts of food, clothing and shelter, but the gifts of language, of culture, of our first experience of love and belonging and most importantly, the gift of a name, a name that ties us to family but is uniquely ours, the name that lets us know that we are both part of something and unique beings.
At once we note that we are at odds with the modern political and economic theories, which are built on the individual as the prime social and economic unit. But this is not correct because the individual, apart from the social order, is not capable of providing for himself. Indeed, the individual is not even capable of reproducing himself. The individual flourishes in and through the community. This is not to denigrate the value of the individual person, since the purpose of the family is to allow the person to flourish; it is to note that persons only exist in and through communities, first and foremost the community of the family.
Therefore, we can judge the success or failure of government by noting the strength of the family units that make up the society. If they are barely surviving and chronically in debt, if mothers are forced to work by economic conditions and unable to attend to the education of their children, if families seem to be temporary and chronically subject to dissolution, if the children have only limited educational opportunities, if they are more concerned with the getting (and destruction) of more things for their happiness, then we may say that the family is materially, morally, and spiritually weak. Alas, these are the conditions that describe too many American families today, and the failure of the family leads to failures in the economic, political, and social orders, failures which have no solution apart from repairing our damaged families.
Starting with the family, we can go on to assess the health of larger communities, not only governmental ones like cities and states, but those communities of work and social life in which we find ourselves and through which we contribute to the common good and to our own development.
In order to flourish, all of these communities require certain things. They require a material base by way of access to productive property which they can own or share; they require training and education; they require relatively free markets; they require a culture of liberty in which they can grow; they require a certain set of shared values if they are to share a common cultural space; they require certain infrastructures such as roads, a money system, courts, etc. Some of these things are or can be directly supplied by the government and others are merely influenced by its decisions. But all the decisions of government must be based on a recognition of their effect on these communities. Government is not, of course, solely responsible for the flourishing of these communities (that would be socialism or paternalism), but it is often responsible for their failure. In order to assure that the government is acting on behalf of these communities, there are certain bedrock principles that must be followed, no matter what the form of government.
The Principles of Government
It seems today as if government is no more than a competition among special interests each fighting for a share of the public purse and a list of privileges from public law. Along with this we note a centralizing tendency that transcends party rhetoric and leads to an ever-growing central government, which displaces all lower units of government and even private association. And, of course, such competition for power must favor the powerful. This self-aggrandizing tendency of government mirrors a similar cult of bigness in the commercial realm. Companies grow “too big to fail,” and hence can act with impunity, knowing that no matter how foolish their actions, they can always have recourse to the public purse; they can rely on economic blackmail: “If we fail, everything fails; bail us or be damned!” And they get their way with the public purse. As I write this, the government is committing trillions to private bailouts, a perfect socialism for the rich necessary to save everybody else. But this is not the first time this has happened; indeed, it is a chronic condition of corporate capitalism. There have been about 19 bailouts in the last 100 years, making them fairly predictable events. The bailouts get bigger as the corporations and the government grow in size.
Yet bailouts have never reached the size and scale of today's crises, and it is likely that the system will not work and must be reformed, probably after a complete collapse. A reform of the system will require an understanding of the proper principles of government. And these principles are the exact opposite of the practice of modern government. Against the the clash of special interests, we assert The Principle of The Common Good; against the centralizing tendency, we assert The Principle of Subsidiarity; against the tendency to favor the rich and powerful, we assert The Principle of Solidarity.
The Common Good
The idea of the common good would seem self-evident, but in fact most modern political and economic thought is based on the priority of private and personal goods. “Greed is good” has become an implicit assumption of our political and economic lives. This idea was first advanced in 1714 in Bernard de Mandeville's The Fable of the Bees, which was subtitled Private Vices, Publick Benefits. Mandeville offered us the paradox that private vice was the key to public virtue, that the water of private interest could be transformed into the wine of the common good. But this view is far too mystical. It is based on the view that the common good is no more than a summation of individual and particular goods, and that there is no transcendent good which unites us all.
But clearly, this is not true. The individual good of a father, for example, could run counter to the good of his family. The father who spends the bulk of his earnings on himself and his own pleasures and leaves little for the feeding of his family and nothing for the education of his children indulges a private good at the expense of the common good of the family. It is only by realizing himself in and through the family that his good and the good of the family can be united. And this is the key to realizing the common good: we must develop the sense that our particular goods are bound up with the common good. We cannot truly be successful at the expense of our neighbors; their success and ours are connected.
The great difficulty of recognizing the common good is that we are all members of the community mostly through participation in particular communities, each of which makes a partial contribution to the common good. That is, we participate in the over-all community in and through our participation in, say, the arts community, the business community, the educational community, etc. The end of each of these communities is partial and private, in the sense of the Latin term, privatus, which connotes a lack of something, a privation. The tendency of private communities is to let their partial and private ends dominate over the contribution they make to the public and general good. But the common good cannot flourish unless we recognize that our particular communities depend on, and are ultimately successful through, the success of the whole community. This takes a constant recognition of the wider community and a constant effort of the will to limit our demands on the community only to what is necessary for, and proportional to, our contributions to that wider community.
As members of vast, modern nation-states, especially those governed by the principles of pure individualism, we cannot help but see ourselves as mere infinitesimal cogs in a vast machine over which we have very little control, save for annual, semi-annual, or quadrennial plebiscites in which we get to choose “leaders” from a very limited list. Indeed, due to the miracle of national television, the government official most remote from us, the President, is a daily presence in our living room, while the person who might be our neighbor, the local mayor or city councilman, remains a stranger whose very name we cannot recall. In other words, we have stood the natural order of government and social life on its head, with the most remote becoming more important than the local.
In opposition to this centralizing tendency, solidarity implies a “bottom-up” view of society. It starts with the family as the basic unit of society. All economic, social, and political activity is built around the family and serves its needs. But because no family is self-sufficient, families in turn require economic and social contexts, including government. Higher social formations have a right to interfere in the affairs of lower organizations, including the family, but this is only a limited right; such interventions can only be used to correct egregious failures, and may last only for as long as necessary to correct the failure. Some problems, of course, don’t go away, such as unemployment: as long as the economic system is unable to offer all persons meaningful employment, then society must provide other means for their dignified subsistence. But this must be clearly seen as a defect of the system, in the same way that the need for a police force or an army is really a defect arising from original sin. From the viewpoint of subsidiarity, society is highly “textured”; instead of a simple system of an “individual/government” relationship, there should be a rich collection of levels within society, each with its own realm of competence and authority. At present, government has absorbed functions which used to belong to the Church or other authorities such as the guilds. Marriage, education, charity, and commercial regulations had been guided by other bodies, even if their decisions were enforced by the state. The all-powerful, centralized state has displaced all of these other and (I contend) more natural authorities. Other authorities, even the family itself, exist only by the sufferance of the central administration.
According to the principle of subsidiarity, the higher-level organization can only justify its existence by the necessary support it gives to lower-level one. Assuming that most functions of political, social, and economic life can be adequately handled at the local level, the higher levels are therefore the least important, and their importance diminishes the higher up they are. This does not mean that they they have no meaningful authority, nor any right to intervene. For example, we know that African-Americans would not enjoy full citizenship in America were it not for forceful interventions by the central government. But even this intervention is instructive, since it involves a community that extends beyond any local jurisdiction, and was clearly oppressed in many jurisdictions, indeed, perhaps in most or even in all, at least to some degree. And since the oppression was egregious, it was clearly the right and duty of the central government to act, even in disregard of local rights. Nevertheless, such interventions should be made only on clear necessity, only as much as necessary, and only for as long as necessary. In general, local organizations should be free to develop in their own way and with their own resources.
One important point that needs to be made about subsidiarity is that not only should control be as local as possible, but funding as well. If the funding for governmental programs comes from afar without directly impacting local resources, it appears to be “free” money, which always distorts the decision-making process. If someone else pays, we can never have enough; when the money comes from our own resources, we tend to spend it as conservatively as we can. This does not preclude higher authorities from making contributions to local programs, but such contributions must be related to the common good, and it does the local authority no good to become dependent on the remote power. This is, as we shall see, one of the most important principles in government funding and taxation.
Solidarity is complimentary with subsidiarity. Subsidiarity provides the vertical dimension of life, while solidarity provides the horizontal dimension; subsidiarity is a connection between elements of society viewed as a hierarchy, while solidarity provides the connections between the elements viewed as if they were on the same level. Solidarity connects us with the common good and impels us, in the name of Christian charity, to act for the good of all. There can be no vision of the common good unless there is solidarity between all the elements of society.
Of particular importance to solidarity is the preferential option for the poor. When we act in solidarity, we act for the good of all. The preferential option for the poor serves as a practical test of whether we are acting for all, or just for some. Under the preferential option, we always examine the effects of any action on the poorest of our neighbors; if it is not good for them, it breaks solidarity. Since we are all inclined to opportunism and rationalization, solidarity, particularly when it forces us to look at our actions from the standpoint of the poor, helps in ensure the common good.
If what we have said so far is correct, then we have provided a purpose for government and the principles of government, and with these tools we can examine our actually existing government to see how well it conforms to purpose and principle, and ask what can be done to change it.