Thursday, March 12, 2009

Why Government?

Why Government?

A Liberal Manifesto

Note: this manifesto deals with rational, competent adults. This is what is meant wherever an individual, or member of society or similar is referred to.


It is the highest of truths that all people are born free to live their lives as they see fit. Individuals may choose, of their own free will, to join a community for the mutual benefit of all. But such a community will inevitably experience a conflict of interests. To resolve this all members of the community must willingly sacrifice some part of their liberty to gain the benefits of being part of a society. But what freedoms should be sacrificed? And who should bear the cost?

The second question is considerably easier to answer than the first. Surely all must be equally deprived of liberty. Any other situation would lead to resentment and unavoidable conflict. It would simply be unfair. Any privileged treatment would lead to an elevation of status...of one over another and that is deeply illiberal.


Someone famus, whom I cannot remember, said government was any entity with a legitimate monopoly on force. Clearly a society that tolerated unchecked aggression and violence would be doomed to certain failure. It is therefore obvious that the first freedom that should be lost is the freedom to cause harm to others. The liberal mantra then becomes; one has the right to do what they want so long as they don’t harm another, impinge upon their liberty or property. Could such an unregulated community peacefully coexist?

I believe not. Let us consider two neighbours, equally free to live their lives as they see fit. One wants to listen to his music very loud while the other wishes to read a book in silence. Obviously they should be able to reach a compromise but they have the right to live their lives as they wish. The rights of individuals will always cause conflict, and the disagreements will not always be so trivial.

Clearly there will be innumerable ways in which our desires will clash with those of our peers and having chosen to suspend some freedom (the right to violence must be renounced by all who join the community) then eschewing more might still be worth the benefit of belonging to a society. Humans need a joint effort to preserve themselves and their freedom.

Government should be thought of as collective effort of must never be considered an entity in its own right (except for specific legal reasons). It is a way free people can work together for mutual self interest.

Therefore it is the primary function of a government to protect the rights of the individual. To do this the government must do several things;

1. Enact laws. All laws are illiberal as they either ban actions or compel them. Either way freedom of the individual is eroded. Laws should be kept to a bare minimum. It is important that specific rights are not designated in law for this will only leave those not mentioned open to erosion. Rather all actions of the individual should be assumed to be legal until they are specifically banned. When laws are enacted they should fulfil several provisos. Firstly they should be simple enough for citizens to understand. Second they should clearly explain the rationale for the law.

2. Enforce laws. Governments will need to employ a police force to ensure laws are followed and individual rights are not eroded. To this end police must be granted a paradoxical power; to protect liberty they must have the authority to deny it. This must be one of the very few instances where an individual can be deprived of property or liberty.

3. Provide for the protection of the community. Armed forces should be raised to prevent aggression from foreign states. Wars should be fought on a liberal basis. That is to say that they should not impede the liberty of others, so only wars fought in self defence are justifiable. But what of pre-emptive fighting? This poses a great problem and could only possibly be decided on a case by case basis. Likewise for conflict settlement. Is it right to stop a tyrant from abusing innocent people who just happen to live on one side of a border? In the interests of liberty the weak should be protected from the strong.


The actual function of government is more complex however. It is a basic premise of liberalism that all people are equally free but certainly not equal. One’s position in a society should be decided by merit, as should their material or spiritual reward for their endeavour. And seeing as all people judge themselves, not by some absolute scale, but relative to their peers then it is only fair that all individuals are given the same chance to achieve their potential. It is illiberal to confine someone to a life of destitution when they have done nothing wrong. A mere accident of birth would remove an individual’s ability to make decisions they might otherwise have.

A vital role of government then is to pay for (though not necessarily provide) universal education. This is an imperfect position. If through their hard work or skill parents are in a position to give their offspring a better chance in life then who would have the right to stop them? But their child would go on to do relatively better than other children, and when they came to have children would be similarly positioned to boost their offspring’s chances in life. There is probably not a better solution than for governments to try their very best to educate all to an equal standard. Seeing as how humans are naturally in competition with each other (as is all life) then this is as good as can reasonably be expected from government.

A dangerous precedent has been set and a quagmire walked into. How many other areas of life could a government intrude upon and claim it was acting in the interests of liberty? Could it not provide all with the same food in the interests of liberty? Clearly not. A little pragmatism is needed here. Remember societies only form because it is in the mutual self interest of individuals seeking to maximise their utility. When a certain point had been reached and an individual’s perceived benefit no longer outweighs the cost then they would have every right to not comply. This argues for a radical and somewhat impractical idea; individual secession. But more on that later. Any action by government to equalise the lives of citizens would presumably act to take from the rich and give to the poor. In a meritocracy it can be assumed that the rich are the more capable, the more organised and the more determined. Surely such a group would not stand for their rights being eroded? And who could stop them? This is not an argument for the rich doing what they like to the poor. For that would be illiberal. Just as forcing the rich to forgo the spoils of their hard work would be.


A community naturally seeks to gain the maximum benefit from resources at hand. Otherwise what would be the benefit to people within? But how to utilise those resources? Society has only so many man-hours, so many tonnes of ore, so many litres of water and hectares of land. Should land be turned over to housing or agriculture? Should time be spent on leisure or work? Should we make cars or fridges? In a free society people must be allowed to choose for themselves how they will distribute their efforts and resources, what they shall make and what they shall buy. A free market would allow anyone to buy whatever they like at a price they deem appropriate. Also manufacturers and providers of services can sell at a price they are happy with. To initiate price controls or to impose quotas would be to erode people’s freedom to choose for themselves.

A rational choice made in the interest of individuals is not as selfish as it sounds. The baker does more for society by providing food than does the charity worker. This is not to decry charity. But by agreeing to buy the baker’s produce many thousands could be fed and then are free to spend their time doing other things. But the baker is only acting in his own self interest. He has made the choice to sell goods to provide for himself and his family. But how do people decide? One must measure the available inputs and consider what outputs are possible. Of all the possible outputs (or combination of outputs) the one that brings most utility should be chosen. But how does one compare different resources? How many cows are worth one litre of water? Is a week off worth more than the produce gained from a week’s work? These are questions for an individual to answer but they require some way of comparing the separate resources.

Assigning monetary value to all resources allows for efficient comparisons to be made. One can say £30 pounds worth of inputs (be they time, land, skill or natural resources) can be made to produce two outcomes. The value of one is £45 and the other is £75. Clearly resources would be better put to use making the second product. But how do we assign the values in the first place? The only truly free, liberal and democratic way is to let people choose. A free market where goods are traded allows society to put a value on all traded goods.

Now individuals are free to make educated and rational choices about their utility. They can efficiently allocate their resources to gain the greatest utility to themselves. On a broader note society at large is benefited by this too. Say people want a product then they are free to assign it value. Take motorized lawn mowers. They could be thought of as irrational and pointless but if people want them who has the right to tell them no? If they are willing to pay a high enough price then someone will realise it is in their best interest to divert resources towards making it. Through this mechanism society always gets what it wants. Even if it is disagreeable to some it is democratic, more so than any government.


There is a major flaw in this line of thinking. It all rests on the premise that people make rational, well informed decisions for the sake of their own self interest. Every human who has ever lived has been near totally ignorant of the vast majority of everything, thus rendering them incapable of making well informed decisions all of the time. From this stems the inevitable market abuses, asset bubbles and bank runs that come with a free market.

A free market then is the most democratic, free and accountable element of any society. But a totally unregulated market would not be beneficial to the individual. Or rather it would not be advantageous to any given individual. The inevitable result of an unregulated free market would be a monopoly. Should a government limit an individual’s success by imposing an artificial limit on their market share? Should an industrious person’s efforts be denied? Yes. For the imposition of a monopoly on a market would limit freedom and reduce the quality of lives. Firstly it would limit the options available to consumers when they want to choose between products. Secondly it would inevitably distort prices. If no one was aware of the true value of resources they could never be efficiently allocated. Thirdly standards would inevitably fall.

So then, like the provision of education, it is an extension of a government’s primary responsibility to regulate an economy so as to make it free and competitive. For if it weren’t, the primary reason for individuals joining and remaining in a community would be removed. Such an unfair society would not be to the mutual benefit.


But what of other areas generally considered to be the government’s domain? What of health care? The welfare state? Transport and infrastructure? Let us start with infrastructure. It is reasonable to say that the whole economy (and therefore all individuals) would benefit from an investment in infrastructure project be it a road, bridge or train line. Should we then not agree to pool our resources and build it? If so should we not all pay for it through general taxation? And would not several private roads or railway lines be wasteful and uncoordinated? This is a good argument for an area of government control.

But what of people who don’t want, or would not benefit from, a public works? Should they be allowed to opt out and only those who would use the road or utility pay an additional tax? Then why not simply charge for its use?

But the arguments against government provision of infrastructure are compelling too. Firstly not all tax payers will benefit equally. Is it really right that someone’s money can be taken and spent on something they don’t want or might not benefit from? Secondly why should a single generation bear the full cost of an investment that will benefit many generations to come? It would be fairer for the government to tax people less and let the private sector build the road. That way only people who want to use the road would pay for it. The population at large would help finance the road through the higher price the road users would charge for their goods or services. So why not just pay for it through taxes if people still end up bank rolling the project? Taxation and government expenditure is notoriously inefficient meaning the total amount of expense for the public will probably be less via the market system. This is a more direct and democratic way for people to share the cost of infrastructure, with most of the risk and cost being born by those who will benefit most.

While surplus capacity could be seen to be wasteful that would only be the case if a single project were as efficient as it could be. An unlikely situation. If there were two train companies operating between two destinations their competition would drive prices down and the level of service up, with the total benefit hopefully outweighing the opportunity cost of surplus capacity.


Personal responsibility should be exercised by all. Every individual is responsible for their own welfare and should not look to others to lead their lives. The welfare state should not be a system whereby more industrious or prosperous members of a society are made to subsidies others. When then would it be in one’s best interest to look after another? It could be argued that giving to others is the right thing to do out of compassion. But right and wrong are subjective. In a liberal society people have the right to make up their own minds about morality and should not be forced into action to satisfy another’s beliefs.

If a people were really so generous and compassionate might we not give people the freedom to give to charity, rather than pay tax? This way no one would be forced into paying for something they didn’t like and the needy would still be provided for. Except we are not that generous or compassionate. It is doubtful that if our tax burden were lightened people would pay an equal amount to charity. This suggests we are being forced to pay for something we don’t want or agree with. But there is still good cause for the welfare state.

Anyone could, through no fault of their own, find themselves out of work. People therefore pay tax to support the welfare state as a form of insurance, covering oneself against the risk of losing one’s job. It would be deeply illiberal to pretend otherwise. Welfare fosters a sense of dependency on the state, rather than on oneself. Welfare should exist only to help those who lose their jobs by helping to pay their bills and finding new work or training. This is in the self interest in two ways; firstly mass unemployment would damage the economy to everyone’s detriment. Secondly everyone can rely on welfare support should they lose a job.

As with all aspects of government and society the liberal case for government is complicated. We have seen how an entirely free society would be doomed to violence and anarchy. For a society to work its individuals must be accepted to make some sacrifices to their liberty through laws and income as taxation.


Yet the benefits of a society would normally outweigh the costs of belonging. Humanity’s ancestors evolved into social beings because doing so was in the mutual self interest. A totally libertarian society could be viewed as an ideal except that the weaker (not necessarily physically) members of society would lose out and they would no longer see themselves as benefitting from that particular society. Such anger would surely result in violent upheaval and revolution. With this in mind it can be argued that it is in everyone’s self interest to ensure that society never becomes too unequal. The mechanism for redressing such imbalances will be the government.

There are many situations though when someone my feel that their society is no longer right for them or that the cost/benefit ratio of belonging is unfavourable. Should a person be forced to stay in a country which extracts taxes to pay for things to which the individual is opposed? If people are free to willingly join a community then they are presumably free to leave the community. The idea of individual secession is a necessary one if a society is to be truly liberal.

When though is government action in the rational self interest? When has the government went too far or intruded upon too much? That can only be a decision for the individual which is why governments must be elected and representative of the people’s wishes.

Finally then society exists to serve the individual and not vice versa. Good social behaviour has evolved because it is in the self interest of individuals. A rational individual will accept limits to their selfish freedoms as being in their own interests. Governments should serve the self interest of individuals but in so doing must ensure a relatively harmonious society.

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