Tuesday, June 16, 2020

Small Government and Effective Government

A standard criticism of libertarianism points to the market's inability to provide public goods. For instance, in his recent book Liberalism and Distributive Justice, philosopher Samuel Freeman writes, "Libertarianism has no place for government to enforce the provision of public goods, those goods not adequately and effectively provided for by markets." In a recent commentary for the Niskanen Center, Brink Lindsey says, "Small government is a false idol, and it is time we smash it. In its place, we should erect effective government as the goal that guides the development and evaluation of public policy [...] Free markets as we know them today are impossible without the modern state, and they function best when embedded in and supported by a structure of public goods that only government can adequately provide."

Notice that Freeman and Lindsey (among many others) seem to simply assume that the state is capable of "adequately providing" public goods and accuse libertarians of neglecting this insight. But this is an uncharitable interpretation of libertarianism. There are plenty of libertarians, myself included, who are happy to assign the state a role in providing public goods but are skeptical of how well real-world states actually provide public goods. For one, the temptation to free ride that impairs the market's ability to supply public goods also impairs the state's ability to supply public goods. As I put the point in my book Unequivocal Justice:

"People will free ride on a public good like a clean atmosphere because they can benefit from it without contributing to it. Mimi will enjoy more breathable air when others switch to a Prius even if she doesn’t drive one herself. So the state is justified as a means of forcing people like Mimi to contribute: for instance, by creating laws that penalize pollution.

The trouble is, a state that efficiently provides public goods is itself a public good: Mimi will still breathe easy thanks to clean air laws even if she doesn’t bother to pay the cost of voting for candidates that pass those laws. A good vote seems cheap, but the full price is surprisingly steep. To vote well, we need to research candidates, study their platforms, and inspect their legislation’s fine print for hidden sellouts to special interests (the Clean Planet Act won’t clean the planet if it smuggles in subsidies to Big Coal). We also have to suffer the costs of suppressing our political biases. After all, we could be mistaken about the environmental impact of, say, nuclear power. But it hurts—a lot, it turns out—to admit that we’ve spent our adult lives voting for the wrong policies and people.

Free riders won’t pay the costs of good government for the same reason why they won’t pay the costs of clean air: they don’t have to. They’ll profit from the good votes of others even if they vote badly or not at all. So the public goods argument implies that people will free ride on the state meant to solve the free-rider problem; the argument ultimately defeats itself."

And this point is not just theoretical: real-world states have done a poor job of providing public goods like clean air. Or take the public good of national defense. This is an example that Lindsey seems willing to concede to libertarians, as he objects to "the “forever wars” in Afghanistan and Iraq, with spinoff military engagements in countries all over the region." Post-9/11 wars--whose benefits for national security have been, in a word, debatable--have cost over $5 trillion dollars and resulted in hundreds of thousands of lives lost.

It's worth asking ourselves why voters haven't kept American military engagement in check. Here public choice concerns about the rational ignorance of voters supply a compelling explanation. Nearly half of Americans didn't even know we were still at war in Afghanistan in 2018. They vastly underestimate the civilian casualties in US wars and the amount of US military spending. (Perhaps this explains why only 30 percent believe the country should decrease its military spending.) But as public choice economists have stressed, individual voters have little incentive to acquire accurate beliefs about these matters given that the odds of their individual vote making a difference are exceedingly small. We therefore have reason to doubt the ability of voters to hold their political leaders accountable for poor governance.

I suspect that plenty of small government libertarians acknowledge the gains that effective government could bring about. I, for one, eagerly agree to Lindsey's principle of effective government, namely that "the government policy or program in question must actually succeed in advancing its stated public purpose, and under no circumstances may benefit narrow private interests at public expense." Indeed, I'm open to, and intrigued by, some of the suggestions for reform offered by Lindsey himself. But a more productive conversation about the relative merits of government reform versus government reduction will acknowledge that much libertarian skepticism about effective government and enthusiasm about smaller government is not, as Lindsey suggests, a mere "ideological fixation."