Merely because governments routinely undertake to do a large number of things, most people tend to assume that it is not only legitimate for governments to do so but also believe that only governments can, should and must do them. This is a mistaken attitude that has enormous social costs that in the worst case impoverishes nations, and in the best case prevents nations from being as rich as they are capable of.
Why do we need a government in any case? The answer could lead us to an understanding of the proper role a government in a free society. But what do we mean by a free society? A society is a collective comprised of individuals, and a free society is one in which every individual is free to do what he or she pleases provided that he or she does not impinge on the corresponding freedom of other individuals.
This freedom of the individual comes with a constraint, namely, that the individual does not initiate force against others, and respects the private property of others. The primary injunction can be stated as, “Do not harm others, and don’t take their property.”
The Monopoly on the use of Force
The shared desired end is a society in which everyone lives in harmony and peace, which end necessarily requires some agency that would enforce, through the use of force if necessary, the primary injunction against force and theft. That agency is what we can call the government. To discharge its function, it must have the monopoly on the use of force to deter any behavior that goes against the primary injunction.
The government is needed in a free society to minimize any potential and actual aggression, force and theft within the territory that it has the monopoly on the use of force. The purpose is minimalist — the protection of society from internal and external threats. For obvious reasons, it is variously known as the protective, or minimalist, or the nightwatchman government.
The monopoly on the use of force has major implications, as we shall see in a bit.
As individuals, we are capable of achieving certain ends through our individual efforts. Most of these individual goals involve what economists call “private goods”. These goods are partitionable in production and consumption. Apples and oranges are private goods. If I grow apples and you grow oranges, I can consume some apples, and exchange the rest for oranges with you. I thus partition the apples into what I consume and what I exchange.
There is another class of goods which require joint production and are not partitionable. These have to be produced collectively, and therefore called “collective goods.” These goods are such that an individual is either unable to produce by himself, or is not motivated to produce without the collaboration of others.
Swamps and Bridges
As an illustration of a collective good, consider the draining of a swamp that will benefit the neighboring farmers. If they all collectively work to drain the swamp, every farmer would benefit. They would produce the collective good which perhaps no single farmer could.
Consider another good — a bridge across the river. It would be impractical and perhaps impossible for any individual to construct the bridge but the people of the city collectively could build the bridge.
The point here is that there are goals that individuals can attain through individual effort, and there are goals that can only be reached through collective action. The latter often involve non-partitionable goods. You cannot build 1,000th of a bridge (non-partitionable in production) and you cannot use only 1,000th of a bridge (non-partitionable in use.) The whole bridge has to be constructed, and the whole bridge has to be traversed by people.
The fact that we do live in collectives — villages, cities — allows us to pursue and achieve goals that are beyond the ability of any single individual. If any individual was forced to live in isolation (the fictional Robinson Crusoe, for instance), he would be materially and spiritually impoverished. Living with others allows us gains from the division of labor, of specialization, and exchange.
It is beyond doubt that we are better off when we collectively produce those goods and services that we cannot do individually. The question is what is the proper agency or institution that we should create and use to produce those collective goods. The answer is not a one-size-fits-all but depends on the nature of the collective good in question.
To help others is a primal instinct. Society has a collective moral responsibility to take care of those in need. Individually we can do a lot by way of charity but collectively we can do better. Should the government be entrusted with collective charity? The answer is no because the government has the monopoly on the use of force. Threatening and/or using force to do charity vitiates its moral and ethical nature, and poisons the whole enterprise.
Society has a collective interest in the education of its young. Should be government be the institution for ensuring that? The answer is no because of dozens of reasons but the most important is once again the fact that the government has a monopoly on the use of force.
Maintaining law and order is a collective good. The main job here is a police function — to deter crime and punish criminals — which necessarily implies the threat and use of force. Since the government has a monopoly on the use of force, it is the appropriate agency.
Limiting the Government Role
My claim here is that the role of the government has to be limited to only those functions which require the use of force. Therefore the government must be prohibited from any other collective activity that do not require the use of force. Those activities must be done by agencies that the society creates specifically for those purposes.
Should the government run the police? Yes. Armed forces? Yes. Because those involve the use of force.
Should the government run airlines? No. Educational institutions? No. Hotels? No. Restaurants? No. Charitable organizations? No. Religious institutions? No. Research and development labs? No. Telecommunications services? No. Produce goods and services that people can collectively organize to produce? No. Because the government’s monopoly on the use of force makes it unsuitable to do any of these.
Why is there a picture of a high-bypass turbofan engine at the top of this piece? Because I like them. They represent some of the most awesome technology that humans have created.