The art of limited government

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Article Highlights

  • How to reform the safety net and details of its implementation are important questions for the conservative project.

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  • A great deal of public policy that purports to enhance people's lives actually drives the nation toward bloated government.

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  • The conservative project must clear the dross that obscures the system of liberty & opportunity the founders designed

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In his first inaugural address, Thomas Jefferson laid out his views on the proper role of the state. He envisioned “a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.”

Unfortunately, Jefferson’s view of a minimally intrusive federal government was not long for this world. Over the course of 200 years, citizens demanded more action and intervention from their lawmakers, and politicians happily obliged. The result is today’s radically more expansive understanding of the legitimate purview of the state.

President Obama’s first inaugural offers a useful contrast with Jefferson’s. In it, he described a functional government as one that “helps families find jobs at a decent wage, [health] care they can afford, a retirement that is dignified.” In slightly more than two centuries, we have moved from a president who believes that the purpose of government is to leave citizens free to live their lives as they see fit to a president who thinks the state is responsible for finding its citizens jobs, getting them doctors, and ensuring they save for retirement.

To be sure, many conservatives would like to lay all the blame for government's expansion at Obama's feet. The truth, however, is that this bloating has taken place over several decades. In 1913, upon passage of the 16th Amendment (which created the federal income tax), total government spending at all levels was about 8% of gross domestic product. By 1940, it was approximately 15%. In 2010, it had risen to 36%. According to Congressional Budget Office projections, by 2038, the size of government will assume European proportions, with spending reaching 50% of GDP.

Nor is this expansion the work only of Democrats. Republicans have been equally culpable, and to return America to limited government, Republicans will have to move beyond simply complaining, reflexively and vaguely, that government is "too big." They must instead develop a concrete, practical approach to answering the question, "What do you propose to cut?" — a realistic set of guidelines that elucidate what government should and should not do.

What guidelines could preserve Jefferson's ethos while also recognizing that the world has changed in dramatic ways? A good place for conservatives to start might be Friedrich Hayek's The Constitution of Liberty, in which he sanctioned two spheres of domestic activity as legitimately belonging to government: offering a minimal social safety net and providing limited correction for failures of the market. Neither of these two roles, Hayek believed, was inherently incompatible with economic freedom or the rule of law.

Today, the scope and reach of our government go well beyond these minimal thresholds. The task facing advocates of limited government, then, is to use these two aims as standards for evaluating, and then constraining, all government activity. Conservatives can identify what existing regulations and spending should be cleared away, and what proposed reforms and new regulations should be allowed, by evaluating whether they are strictly necessary to preserving a true safety net and correcting for real market failures. Given that the overwhelming majority of today's interventions do not meet these standards, it offers a useful limiting principle for gradually returning America to the path of constrained, constitutional government.

THE SAFETY NET

In December 1946, the misanthropic comedian W. C. Fields lay on his deathbed, surrounded by his physician and loved ones. Outside his hospital room, they heard the shouts of a poor newsboy hawking papers in the snow. Moved with uncharacteristic compassion, Fields called over his physician and mustered just enough energy to whisper, "Poor little urchins out there — undernourished, no doubt improperly clad — something's got to be done about them, something's got to be done...." He was silent for a few moments and then called over his physician once more. "On second thought," he whispered, "Screw 'em."

To listen to liberal politicians today, one might think Fields's outburst summed up the conservative worldview. In 2011, President Obama said of his political opponents, "Their philosophy is simple: We are better off when everybody is left to fend for themselves and play by their own rules." It is common to hear that conservatives care more about fiscal discipline and economic growth than they do about the plight of the poor.

To be sure, there is no credible (indeed, possible) plan for righting America's fiscal ship without substantially reforming the myriad entitlement and benefit programs initially designed to serve the poor and the elderly as part of a broad government safety net. The problem is that these programs have expanded well beyond their purported aims, providing much more than mere backstops against poverty in old age. Today, more than 60% of annual federal spending goes toward entitlement programs. Social Security's trust funds will be insolvent by 2033, Medicare's by 2024. Without reform of these programs, spending on entitlements will drive the annual federal budget deficit to 10% of GDP in less than 50 years.

The means-tested federal programs launched as part of the War on Poverty, too, have ballooned over the years. Family support, food assistance, Medicaid, and Supplemental Security Income (SSI) for the indigent and disabled totaled $432 billion in 2010 (a bit less than 3% of GDP, and 8.5% of the 2010 federal budget). In 2010, benefits from means-tested programs were collected by 34% of American households. For comparison, roughly 15% of the population lives below the poverty line.

To be serious about fixing our debt and deficit problem means we must be serious about fixing spending on these programs, particularly entitlements. A serious conservative project, however, cannot simply treat the safety net in modern America as just another government boondoggle. Indeed, few if any conservatives today believe the weak, sick, elderly, or poor should be left without any support from the government. Most believe that it is appropriate for the government to provide some safety net for its citizens. Hayek writes, "The necessity of some such arrangement [for poor relief] in an industrial society is unquestioned — be it only in the interest of those who require protection against acts of desperation on the part of the needy." Most conservatives are very comfortable with the state providing some minimal standard of living in terms of food, shelter, and medical care.

The basic problem is that America's minimum "safety net" has become appallingly broad. It increasingly has little to do with helping the poor, and much to do with currying favor with voters and smoothing the risks out of ordinary life. For example, we often hear that Social Security is part of a basic safety net. But as currently configured, the program is in large part a benefit to middle-class people, the majority of whom have taken more out of the system than they ever put into it. Similarly, Medicare Part D — which subsidizes prescription drugs for seniors — is not really part of the safety net for the poor, nor was it designed to be. Rather, it is a $62 billion benefit consumed by a group that is made up primarily of middle-class Americans.

Clearly, there is room — a lot of room — to cut these programs, trimming them back into the shape of a true social safety net. The challenge for conservatives is to identify what precisely the contours of that safety net should be. When it comes to proposed new spending, or reforms to existing spending, where should we draw the line?

Determining what is and is not within the scope of a safety net, properly understood, begins with the question: "What is an unacceptable standard of living in America?" As Hayek notes, the answer to this question is in large part a function of "the general growth of wealth" — the fact that what defines acceptable standards of living changes over time. It is probably fair to say that conservatives and liberals alike believe it is unacceptable for someone in America in 2013 to go without access to essential medical care, sufficient food, and basic shelter. Providing these minimal goods is therefore an appropriate function of government. But it is certainly not the role of the safety net to substantially increase material equality for its own sake. Nor should it completely denude life of non-catastrophic risks, or distribute tax dollars to cronies and favored political constituencies.

Still, conservatives need to do more than simply explain why today's approach to government is inefficient and inequitable. They cannot merely complain about bloat to be reduced and cut; rather, they must make an affirmative case for a conservative vision of the safety net. It is up to them to limit the definitions of "essential," "sufficient," and "basic" so that they do not stretch beyond all recognition. This requires identifying and supporting those benefits and programs that do pass the "essential," "sufficient," and "basic" test, while also being clear-eyed about those benefits that fail to meet this standard.

Some illustrations may help to clarify. If we accept that Medicaid in fact improves health outcomes among the poor and that its costs can be controlled over the long term, the program represents an appropriate function of the safety net. Subsidizing prescription drugs for seniors of all income levels, however, does not. This is simply a political favor to a key voting bloc. Food-aid programs for the indigent are part of the safety net, but agricultural subsidies to prop up farmers' incomes are not. Publicly funded housing for the poor — whether through vouchers or in-kind provision — may be part of the safety net. Rent control and the National Flood Insurance Program, though, are not. A guaranteed minimum Social Security benefit that lifts seniors to the poverty line is part of the safety net, but paying anyone who is not poor any more than he paid into the system (plus a reasonable rate of return) is not.

These approved aid programs are still very costly, but at least they can be defended as an essential part of the safety net, allowing clear lines to be drawn separating them from unnecessary government bloat. To be sure, government can and should eliminate waste from these programs; moreover, the 1996 welfare-reform law showed that government support programs should never be designed to be permanent, as such policies can produce intergenerational cycles of dependency. Despite this room for improvement, however, few conservatives really want to kill these programs and stop providing their services completely.

The conservative critique of the modern American safety net isn't an objection to its existence; rather, it is that it has transformed into something it was never intended to be that is fundamentally at odds with America's limited-government principles. How to reform the safety net and the details of its implementation are important questions for the conservative project.

MARKET FAILURE

The second area of legitimate government activity is correcting "market failure" — specific cases in which free markets, left to their own devices, do not produce efficient outcomes. Since Adam Smith published The Wealth of Nations, nearly all economists have agreed that such circumstances can justify some degree of state intervention — not to weaken free enterprise, but to strengthen it.

There are four major sources of market failure. First, monopolies — and a related phenomenon, price-fixing through the collusion of competitors — produce a host of well-known harms, ranging from lower quality and higher prices to less innovation and more rent-seeking. But there are times when permitting a monopoly may make sense — for instance, when it protects intellectual property. The Constitution gives Congress the authority to grant patents and copyrights to "promote the Progress of Science and useful Arts"; that is, to establish temporary monopolies over intellectual property as an incentive to innovate. Although the specifics of intellectual-property protection are fiercely debated, the idea that some form of intellectual-property protection is an appropriate function of the government enjoys wide currency among economists.

Unfortunately, governments have at best a mediocre track record of sorting "good" monopolies from "bad" ones and making policy and litigating accordingly. Because monopoly and perfect competition exist as two ends of a spectrum — both of which are seldom, if ever, realized in the marketplace — policymaking in this field tends to require nuanced weighing of interests and prudent judgment calls on a case-by-case basis, tasks at which government is not particularly adept. Moreover, the government may itself set up monopolies to serve its own aims — such as state lotteries that provide revenue or public schools that serve entrenched interests. In short, when it comes to addressing this particular form of market failure, the government has not shown itself a competent or reliable defender of the public interest.

The second major source of market failure is the economic problem of externalities. In a nutshell, externalities affect our well-being outside the realm of prices and free markets. A classic example is the manufacturer that causes extensive pollution in the course of making its products: The costs of the pollution are borne not by the market participants (the producer and the consumer), but rather by the public breathing contaminated air and drinking unclean water.

Because externalities exist outside of markets, markets are often unable to neutralize them, which is why addressing them might legitimately fall under the purview of government. It is worth noting, however, that markets are not always incapable of correcting for externalities. Ronald Coase won a Nobel Prize in economics by showing that private bargaining can work at least as well as government action to solve externality problems, if property rights are clearly defined and bargaining can occur efficiently. Rather than banning pollution or setting arbitrary limits on it, then, a more efficient solution might be to assign legal property rights to, for instance, a river, and let private parties negotiate the acceptable amount of pollution. This idea is known as the "Coase Theorem," and there are myriad examples of this approach being used to effectively solve externality problems in lieu of government action.

As with monopolies, however, complications arise from the fact that externalities can sometimes be positive. Beekeepers, for instance, create a positive externality for farmers whose crops are pollinated by the insects. This duality makes policymaking in this arena another difficult matter of prudential judgment — of properly identifying externalities, calculating their magnitude, identifying the affected parties, and determining the net social cost of fixing the problems. Externalities are, in other words, another market failure easily identifiable and solvable on a blackboard, but devilishly tricky to ameliorate in the real world through government diktat.

The third major form of market failure is public goods. These are goods and services that possess, at least to a large degree, two key traits: They are non-rival and non-excludable. In other words, the enjoyment of a public good by one person does not preclude the enjoyment of that good by another person, and it is not possible or cost-effective to exclude some people (typically, those who have not paid for the privilege) from using the good. National defense, police, roads, and bridges are classic examples of public goods. In contrast, a "private good" — like a doughnut or a pencil — is both rivalrous and excludable.

Public goods can make markets fail because they tend to be underprovided by the free market. Many of these goods are thus supplied by government, funded through taxes. There are, however, two major downsides to government provision of public goods. First, the term has been abused beyond recognition in public debate. Political liberals like to claim, for instance, that education is a public good. This is obviously untrue: Consuming education is both excludable (many private schools and public charter or magnet schools don't let just any student walk in and matriculate) and rival (if not, class sizes would not matter). Education creates positive externalities, but that does not make it a public good.

Second, it is far from clear that government can identify the socially optimal levels of public-good provision and of taxation to pay for it. After all, whether we purchase the right amount of national defense, roads, or fire service is a topic of continuous and heated debate, as are the taxes required to fund these items. And some things that may technically qualify as public goods — such as arts programming and basic scientific research — can be and frequently are provided by the private sector, either on a for-profit or charitable basis. Conservatives rightly question whether government provision of these public goods is closer to optimal than what an unsubsidized market would provide.

The fourth major source of market failure is information asymmetry — when one participant in a market transaction has more information than the other participant. Many market transactions occur in the presence of information asymmetries — the market for used cars remains brisk, even though sellers typically know far more about the vehicles for sale than the buyers do — but in the worst cases, asymmetries can cause markets to melt down entirely. One timely policy example is the case of health-insurance markets, particularly under the guaranteed-issue requirements of Obamacare, in which insurers must cover all applicants regardless of health status. If individuals can obtain and drop coverage without worrying about being denied insurance if they become sick, people who know they are likely to be healthy will forgo insurance (and premium costs). When they believe they are likely to need more medical care, they'll sign up for coverage. On the insurer's end, the result is that the pool of people covered at any given time is likely to be composed disproportionately of those needing extensive medical care. This drives up premiums for everyone, causing enrollees at the margins — people who may not need all that much care or very expensive care — to drop their coverage. This drives premiums up even further, producing the so-called insurance market "death spiral."

The government can help in this kind of situation by requiring thorough disclosures in certain types of transactions and by prohibiting insider trading and many other market predations. In many (if not most) cases, however, the private sector can sort out information asymmetries more efficiently than the government can — through warranties, third-party ratings, and contractual arrangements. And, as the case of Obamacare shows, government intervention can in some cases exacerbate the effects of asymmetries. Thus, while information asymmetries can be legitimate cause for government involvement in the economy, regulation tends to be an overly blunt instrument.

What do all these sources of market failure tell us about how to shrink government? They offer the foundation for identifying and articulating a clear set of criteria by which to determine when, and how, government can permissibly intervene in markets. This in turn can help conservatives support government intervention when it is required without opening the door to an endless expansion of regulatory red tape and unrestrained spending on public works.

RULES FOR INTERVENTION


In developing these guidelines, it is necessary to begin by placing the burden of proof on those advocating government intervention. They must demonstrate first that one of the aforementioned market failures exists — which is precisely the stage at which many government policies fail. For example, President Obama claims that federal intervention in mortgage markets is justified by the fact that the housing crisis was caused by an information asymmetry — by "mortgage lenders that tricked families into buying homes they couldn't afford." But anyone buying a home must certainly know that prices can rise and fall; simple arithmetic determines whether a monthly mortgage payment can be made on a prospective buyer's current wage. Mortgage contracts are indeed complicated — in no small part because of government regulation — but the housing crisis stemmed from a lack of common sense and personal responsibility, not trickery on the part of lenders or a failure of markets.

President Obama has also championed the "public good" of high-speed rail, which will supposedly revolutionize the transit system and have long-term, widespread benefits. In truth, however, high-speed rail fails the test for being classified as a public good: It is both rivalrous and excludable. Moreover, it is not clear that the socially optimal level of high-speed rail provision outside certain highly urbanized East Coast areas is greater than zero. Among the planned federal expenditures are a $715 million subsidy toward a project to build fewer than a hundred miles of track between the small towns of Borden and Corcoran in California's Central Valley and funding for a "high-speed" train from Iowa City that will take longer to get to Chicago than the bus does today.

But even if some perceived problem does meet the technical definition of market failure, that alone is insufficient to compel public action. The market must also be failing in practice. There are many cases that illustrate the difference — cases in which markets work efficiently because technical sources of market failure are overcome by citizens' initiative and resolve. When people spend a Saturday morning cleaning up a neighborhood park or a philanthropist funds basic cancer research, they are overcoming market failures.

In fact, people avoid many market failures just by being decent and courteous. Most businesspeople want to prosper honestly, not by cheating consumers or using predatory business tactics (even if they could get away with those practices). Decent people refrain all the time from creating burdensome externalities for others. And most Americans do their part to both provide public goods and promote a compassionate social safety net without government — by giving to charity.

Still, some market failures will inevitably resist private solutions. In these cases, should the government always act? The conservative answer is: "Only if a policy intervention can actually solve the problem in a cost-effective manner." And this bar is much higher than many people realize. Many market failures are irremediable by government at a reasonable price. A person may be bothered by the negative externality of the traffic noise he hears in his office while at work, but there is no way for the government to fix the problem without costs that would vastly outweigh any benefits.

The same is true of the tangled web of new economic regulations created over the past few years. The 848-page Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was enacted ostensibly to sort out information asymmetries between informed financiers and ignorant consumers. But it fails the test for government intervention: According to the evidence so far, the law won't prevent another crisis, and the regulations will require more resources than they save. To the contrary, the law has institutionalized the principle of "too big to fail," raised the cost of borrowing for the public and private sectors, and secured the position of a small number of dominant firms in the marketplace, all while placing great and unreviewable power in the hands of the Treasury secretary.

Taken together, these criteria establish a high threshold for government involvement in the private economy, even where market failure might be seen to exist. The figure below represents the process by which advocates of limited government should analyze any proposed or existing regulation to determine whether it is a justifiable, and truly necessary, correction of market failure.



 The figure demonstrates that while a great deal of state intervention in markets may sound sensible, most of it in fact amounts to unnecessary expansions of government's power and scope. To make matters worse, a great deal of government activity isn't even aimed at the two justifiable goals of providing a safety net and correcting for market failure. Much public policy is simply ad-libbed — overreacting to some unfortunate event (like a natural disaster or mass shooting) — or driven by a vague philosophy no more precise than "the government should do nice things for people." Much of today's public-spending binge serves purposes not remotely related to the basic functions of government — purposes like rewarding political cronies (such as public-sector unions), social engineering (such as the housing policies that led to the 2008 financial crisis), and good old-fashioned pork (like nearly the entire 2009 stimulus package).

In the end, a great deal of public policy that purports to enhance people's lives actually drives the nation toward a system of bloated government that most people, according to opinion polls, say they do not want. The challenge facing the conservative project is to turn the criteria and rules developed above into a practical alternative to the limitless government expansion that many Americans find so deeply alarming.

THE ALTERNATIVE

If the government does adhere to these rules and criteria — limiting public provision to a minimal safety net, holding back in most cases of market failure — many problems, including several currently addressed by government, will go unresolved by the public sector. Principled politicians will have to tell citizens that, while things aren't perfect, government can't step in — because government can't solve the problem, at least not in a way that uses tax dollars effectively. This may make for difficult politics, but it is essential to imposing some reasonable constraint on the growth of the state.

It does not mean that solutions to public problems will become impossible. A dangerous progressive fallacy holds that if the government doesn't care for a group in need or solve a market failure, those people will remain neglected and the failure unresolved. The reality, however, is that many of these problems don't require government at all. Rather, they need voluntary action and a healthy culture in which citizens do things for one another without being forced or bribed by the state. What these problems call for, in other words, are solutions derived from America's "social capital": the trust and social cohesion that promote voluntary activity to meet challenges in civil society.

Most people know from experience that trust and cohesion in healthy neighborhoods and communities make life easier, more pleasant, less bureaucratic, and more efficient. Economists have shown that more abundant social capital makes people more prosperous, too. An enormous body of research shows that it is easier to conduct business in high-trust societies and that these societies require fewer resources for policing and dispute adjudication (as there is less cheating, corruption, and crime).

In societies with high levels of social capital, the poor and elderly must not necessarily become wards of the state. They benefit from high-quality civic and charitable institutions, in which people help one another for mutual benefit. The problem of externalities, too, is addressed by high social capital: In such communities, where neighbors are respectful of neighbors, people are more likely to refrain from making excess noise or letting their property deteriorate. Many minor business deals between friends require nothing but a handshake, and people don't take advantage of one another — avoiding the problem of information asymmetry. If a person sees something suspicious at a neighbor's house, he goes to check on it, reducing the need to employ a large police force (a public good). Every day, social capital solves small and large market failures that government can't and shouldn't address.

It is easy to see how important social capital is to people's lives — and how essential to limited government. Until recently, however, there were few good measures of it. In response to this shortage, researchers at several universities and foundations sought in 2000 to measure social capital with a large, nationwide survey. They asked tens of thousands of Americans about their levels of trust, charity, and community involvement. Dozens of communities were represented, from rural areas to big cities.

The results were fairly predictable. The survey found that in small communities where people know their neighbors, social capital is high. In big, anonymous cities, social capital is low. On an index of social trust, urban centers like Chicago, Boston, and Los Angeles fall near the bottom; the top two communities, meanwhile, are rural areas and small towns in North and South Dakota.

The links between social capital and America's prosperity have in fact been evident to social scientists for many years. As early as the 1830s, Alexis de Tocqueville was impressed by the astonishingly high levels of social capital found in the United States. As he explained in Democracy in America,

Americans of all ages, all conditions, and all dispositions constantly form associations....The Americans make associations to give entertainments, to found seminaries, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; in this manner they found hospitals, prisons, and schools. If it is proposed to inculcate some truth or to foster some feeling by the encouragement of a great example, they form a society. Wherever at the head of some new undertaking you see the government in France, or a man of rank in England, in the United States you will be sure to find an association.

This phenomenon was, in Tocqueville's mind, the secret to American success. In the eyes of a 21st-century social scientist, Tocqueville was simply observing the fact that social capital solved market failures that government couldn't address, given America's sparse population and ungovernable frontier. It would have been impossible to tax the population sufficiently to fund government hospitals and schools in, say, rural Missouri in the 1830s. The nation was successful because social entrepreneurs, to use today's label for them, took these tasks upon themselves. In the process, they built strong communities of trust, reliant on themselves and not on the government. This is the legacy of freedom and limited government that Americans still say they love.

These observations about the importance of social capital — and America's distinctive reliance on it — remained essential to American success well after Tocqueville's time. In one study in the 1950s, the American political scientist Edward Banfield spent nine months in a small, poor town in southern Italy. His vivid observations were documented in his book The Moral Basis of a Backward Society, in which he set out evidence that the town was impoverished because the people did not recognize or reward meritorious behavior, had little sense of fair play, and possessed no sense of charity toward one another. Banfield noted, for instance, that the local orphanage in the town was run by nuns in a crumbling medieval monastery. No one in the town gave a lira to support the orphanage, and not even "half-employed stone masons" volunteered to help in its upkeep — even though all the orphans came from the town itself.

Banfield made his point by comparing the Italian town with a comparably sized little town in Utah. On one random day, the local newspaper in the Utah town contained mentions of dozens of voluntary charitable projects and activities. The local church had just raised $1,393.11 in pennies for a children's hospital 350 miles away; a Red Cross membership drive was underway; a circus was being held to raise money for a new dormitory at the local junior college; and there were Parent Teacher Association meetings all over town.

But while social capital is crucial to the health of the nation — and the indispensable alternative to boundless government — some experts believe it is generally in decline. Harvard political scientist Robert Putnam's 2000 bestseller Bowling Alone argued that people's trust in one another and their tendency to participate voluntarily in their communities has plummeted in recent decades. Not all social scientists agree, but clearly Putnam's claims resonate with millions of Americans who have seen evidence around them of eroding social networks and of falling trust in their communities.

Putnam laid the blame for declining social capital on phenomena such as television and urbanization. But there is more to the problem: The rise of statism is also a key reason for the slide away from the self-governing ideals that Tocqueville found so striking. The voluntary sector diminishes as the public sector grows and takes over more functions in people's lives. More of life is viewed as the responsibility of government, and therefore not of individuals. As Herbert Hoover — himself no opponent of central planning or proponent of laissez-faire economics — said in 1931, "[J]ust as the largest measure of responsibility in the government of the nation rests upon local self-government, so does the largest measure of social responsibility in our own country rest upon the individual. If the individual surrenders his own initiative and responsibilities, he is surrendering his own freedom and his own liberty."

This is not merely conjecture, but demonstrable fact. In dozens of studies, economists have shown that government funding "crowds out" voluntary contributions of both money and time to charities. The academic literature shows that a marginal dollar in government spending on efforts that non-profits also address crowds out as much as fifty cents of charitable giving. The effect is most pronounced in assistance for the poor and vulnerable. This is not the result of changing generational attitudes, either: One study finds a causal relationship between the growth of government during the New Deal era and a 30% decline in church-based charity over the same period.

The crowding-out effect stands to reason: If the government is supporting some cause, individual citizens will conclude they do not need to do the same. Individuals are also less likely to be asked to help in the first place: Research by economists James Andreoni and Abigail Payne has found that non-profits receiving government grants quickly reduce the amount of time and effort they spend on fundraising.

This pattern is noxious to a flourishing nation. Government insinuates itself into more and more corners of people's lives, alienating them from one another and their communities. It obviates what Edmund Burke called the "little platoons" of ordinary life, which create meaning in a way the government never can or will. It is thus doubly important for conservatives to find an approach to properly binding government: It is the only way to preserve a strong civil society, which in turn is the only bulwark against the limitless expansion of the state.

THE ART OF LIMITING GOVERNMENT

Today's conservatives clearly need to develop an alternative to the status quo. They must craft an approach to governing in which the state's economic interventions are limited to ensuring minimum basic standards of living for the poor and to addressing genuine market failures (and then only cost-effectively, and only when private individuals and communities can't or won't do it for themselves). This approach to governing aligns with the vision of our founders — but, unfortunately, bears no resemblance to the massive favor factory that passes for government in America today.

How should conservatives go about returning government to that founding vision? A useful way of thinking about the problem comes from an unexpected source: the differences between Western and Eastern art. In the West, artists generally see a blank canvas as empty, ready to be filled through the artist's inspiration. A painting does not exist until the artist places color and shapes on the canvas. In the East, by contrast, artists don't think of creating something ex nihilo. They often start with the belief that the finished work already exists, and simply needs the excess parts stripped away. The easiest way to understand this approach is not by thinking of an artist's canvas, but rather of a block of stone to be sculpted. Before the artist begins, the finished sculpture exists within the block. The artist's job is to chisel away the parts that are not part of the sculpture.

The Eastern approach to art provides a useful framing technique for thinking about American government. America is a work of art — an expression of the audacious, creative, and revolutionary vision of our founders. And the process by which America has lost sight of this vision resembles the Western artistic philosophy: With every generation, we have sloshed more and more paint onto the canvas, adding laws, regulations, taxes, and social-engineering schemes. The result today is garish and ugly; it bears little resemblance to the founders' masterpiece.

The challenge of the conservative project today is to approach the state as an Eastern artist would — to take things away to reveal the American experiment within. The project is not a destructive one, simply tearing down the state willy-nilly; rather, it is a creative one, one that will require carefully chiseling away the statist dross that obscures the system of liberty, individual opportunity, entrepreneurship, and self-reliance that the founders designed.

Learning exactly what to take away must become conservatism's great project. This means accepting and even championing state involvement where appropriate, but recognizing that public policy is usually a blunt instrument with costs that frequently exceed the benefits. It also means articulating a positive vision for America rooted in the moral propositions that make the nation exceptional. The art of limited government is to define what must be removed from the modern welfare state based on tangible rules and principles — grounded in America's distinctive ideals, and ably articulated by the founders — about the relationship between the citizen and the state.

Arthur C. Brooks is the president of the American Enterprise Institute. This essay is adapted from his latest book, The Road to Freedom (Basic Books).

 

 

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Please join us as four of Washington’s most distinguished political observers will revisit the Watergate hearings and discuss reforms that followed.

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No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.