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|  Originally Posted by Jeffrey Harold Hyman:
Can government action ever do any good, or is anarchy the optimal form of government?
I think this is really two separate questions: can government action ever do any good? And: is anarchy the optimal form of government [social organization]? I'll give a long answer to each.
Regarding the first question, I think the answer is obviously "yes." Government action frequently does some good for some people in some places some of the time. The question that consequentialist libertarians, like myself, ask is whether a government program does more good than harm (and for whom), on net and over the long run. Every government action has tradeoffs and unintended consequences, and these are generally downplayed and ignored when we are debating the merits of the program.
For instance, it is true (in theory) that government stimulus spending can boost GDP in the immediate short-term. But over the long-term, increased government spending must be offset by higher taxes, and therefore depressed production, consumption, savings, and investment, which will reduce economic growth. Deficit spending kicks the problem of higher taxes down the road, but it leads to higher debt burdens that hurt growth, raise interest rates, crowd out private investment, and eventually necessitate painful cutbacks, austerity, and tax hikes. Kenyesian stimulus burdens the productive sectors of the economy, typically for the benefit of politically connected interest groups, and misdirects resources from where they would best be used to where politicians would like to use them.
Expansionary monetary policy has the same problem of short-term benefits for employment and more severe, but less obvious, costs in inflation and then later even higher unemployment. Welfare programs give immediate relief to the poor but can create dependency issues that lead to further entrenched poverty. Unemployment programs provide benefits to people out of work but also lead to higher rates of unemployment. Minimum wage laws give some workers higher wages at the price of fewer people being hired. Drug prohibition makes drugs more expensive, thus (all else equal) reducing consumption (although not necessarily prevalence of usage), but it also creates a host of other problems like black markets, violence, impure drugs, disease, overdosing, enforcement costs, mass incarceration, higher rates of addiction, crime, and on and on. Quotas, tariffs, and trade restrictions protect domestic interests' jobs and profit margins at the expensive of consumers and the overall economy.
It's an empirical question whether a particular government program does more good than harm, and for most of our social and economic activities, even liberals agree the government should not be involved. The vast majority of our daily lives is unregulated, undirected, and entirely voluntary decisions and associations. We choose where to work, what to make, who to marry, where to live, what to eat, what to drive, where to worship, what to say, what to read, and indeed most of what is important about how we live. The main restriction we place on social behavior is when your actions hurt other people and interfere with their equal rights to live their own life freely and unencumbered. Libertarians simply insist that we respect each person as an end in themselves, and that any encroachment on their freedom be specially justified by a high burden of proof that the benefits of state action be for the general welfare, not special interests, and that they outweigh the costs in terms of growth forgone, dollars spent, or liberty lost.
The second question about whether anarchy is ideal is similarly complex, in my view. Philosophically, I'm an anarchist: I don't see any reason, in theory, why people cannot effectively handle disputes, social issues, and collective action problems through non-state means. In fact, most of our wants, needs, and conflicts are already provided for and adjudicated by individuals acting through non-governmental mechanisms: i.e., markets and institutions of civil society, like families, churches, and communities. British common law evolved through a bottom-up, competitive process of civil and criminal dispute resolution that was long independent of the king and parliament until it became slowly absorbed and monopolized by the state.
Many other state functions were handled by private associations until they were also taken over by the state, and it's simply an empirical question whether government agencies legislated into existence do a better job than the evolved private institutions they replaced. Many people simply accept as an article of faith that governments (particularly democratic ones) are automatically the best institutions we have to solve any and all problems, even though a critical examination will show that states' comparative record on top-down management of environmental policy, currency stabilization, financial regulation, business cycles, poverty alleviation, and criminal justice is, to be generous, rather mixed.
That being said, the reality is we do have a government, and it would be silly and ahistorical to pretend we can start over and devise the perfect system of social organization on a blank slate, ignoring the intellectual, historical, cultural, and social realities about the world we really live in. The state is a powerful meme. Practically speaking, I am a libertarian, meaning that I want to reduce the size and scope of state power in specific areas where it is doing the most harm in order to promote general well-being over the long-term. The truth is that a healthy, functioning society needs strong, stable institutions like rule of law, private property, civil rights, and courts to survive, and without that preexisting cultural foundation, no society, with or without a state, can be expected to thrive.
After the collapse of the USSR, Milton Friedman said the former communist countries needed to do three things: privatize, privatize, privatize. He later admitted he had been wrong, because he had not recognized that these societies had no private, non-state sphere of institutional arrangements in which to privatize into. They lacked what Bill Niskanen termed "the soft infrastructure of a market economy": a legal system to protect and define property rights, a functioning financial accounting system, and general cultural attitudes regarding trust and respect. The post-Soviet experiment with privatization was a disaster, dominated by corruption, cronyism, and general lawlessness, because they did not understand that a functioning free market economy rests on foundations of evolved social institutions and cultural attitudes, which can atrophy and be lost when they are disused and which take time and conscious effort to rebuild.
That being said, Russia and the other former communist nations are clearly much better off now than under a totalitarian state, but they still have a long way to go towards rebuilding civil society and market institutions, and it took a lot of missteps and trial and error for their peoples to discover a more optimal way to live together in a free society. It is clearly possible to deregulate or privatize the wrong way when the necessary institutions are not there to replace state functions, but the advantage of a free society is the spontaneous order that emerges from individuals cooperating to solve problems and fulfill their desires.
The last point I want to make about anarchy is that almost everyone is what Ben Powell calls a "sometimes anarchist." It is possible to imagine, and indeed we have current and historical examples, a state that is so predatory and so harmful that anarchy would be preferable to it. Somalia (that favorite straw man) is a perfect example of this: by most measures (disease, mortality, longevity), Somalis are as well or better off in the current post-war anarchic order than they were under the violent, predatory state that preceded it. By many measures, like inflation and miles of road per capita, Somalia is comparable to its demographically and culturally similar be-stated neighbors. North Koreans would undoubtedly be better off if the DPRK state simply collapsed and stopped working the whole country like a cultish slave labor camp.
Some states are so bad that a country would be better off without one at all. More ideally, states like Soviet Russia and East Germany went through a much more orderly process of dissolution and capitulation, moving from total state control to a much smaller and more limited government, which undoubtedly prevented a lot of chaos, violence, and property damage. This process can often be painful in the short-term, but the long run benefits are worth it to regrow a free market and a free society.
The lesson I draw from this fact is that, rather than looking at government in general, because there is no such thing as government in general (the governments of Maoist China and modern Luxembourg have about as much in common as fundamentalist Islam and fundamentalist Jainism), we should look at particular governments and particular programs, determine if they should be done at, evaluate if they should be done by the state, measure the costs and benefits, see if the private sector can do it better, and discover the best way to get there from where we are now.
Libertarianism, broadly defined, is philosophy promoting individual rights, human well-being, and limited government, emphasizing the value of free markets, personal liberty, and spontaneous social cooperation, and characterized by a general skepticism towards government action. We may never get to a stateless Utopia, but we can do better than we are now. As Thoreau said, we demand not at once no government, but at once a better government. |
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When can government make sense?
