Instead of Tax Hikes: The Philosophical Case for Limited Government

by Wyoming Liberty Group Staff

As promised, here is the first installment in a series on why and how to reform government spending. This article addresses the "why" question; in addition to economic analysis, there is a distinct philosophical reason why government should be small and strictly limited.

A philosophical examination of the role of government begins with a question that was asked 45 years ago by Harvard professor Robert Nozick:*

If the state did not exist would it be necessary to invent it?

The flip side of this question, which Nozick also put forward for discussion, is "why not have anarchy?"

This is not a discussion of the American constitution, but it is worth noting that our nation's founding document both creates and limits government. The Founding Fathers thought it necessary to invent the state as well as to enumerate its powers and give coming generations the tools to keep the state small.

A key component in the discussion of the role of government – in the constitutional context as well as from a general philosophical viewpoint – is the idea one has of how we interact with each other. Statists often present man as a "rational egoist", a term introduced by John Rawls in his book A Theory of Justice. We pursue our goals, Rawls says, with indifference to how our pursuit affects others.

Nozick is of a different opinion. If people are put in a situation where there is no government, they will, he says, generally

satisfy moral constraints and generally act as they ought. Such an assumption is not wildly optimistic; it does not assume that all people act exactly as they should. Yet this state-of-nature situation is the best anarchic situation one could reasonably hope for.

In other words, we are not egoists, but self-interested yet compassionate individuals. We can, generally, interact in a way that is mutually beneficial to all of us.

Nozick's idea of human nature quickly leads to the conclusion that we only need a government as an exception in our lives – for the strictly limited purposes of protecting life, liberty and property. On the other hand, the Rawlsian idea of man as a rational egoist becomes the foundation for a large government with vast presence in our lives.

The difference between the two ideas of government could end here, forcing us to trace our argument for or against government back to an insoluble difference in our perception of the nature of man. That would be the end of the philosophical argument on what role government should play in our lives, leaving the final point in either direction to be made by careful economic analysis of the merits and demerits of government spending.

As a political economist I have plenty of analysis to provide that overwhelmingly concludes against government. However, we do not have to go that far in solving the dispute between Nozick and Rawls – between proponents for a minimal state and proponents for big government. All we need to do is examine the logical merits of the rational-egoist argument.

If man is an egoist, even a rational egoist, then he is indifferent to the suffering of others as a result of his own actions. This indifference is embedded in his nature; it is perfectly normal for an egoist to be just that – an egoist. Therefore, everything that the egoist does will be defined by his egoistic moral constitution.

Including government.

If we are all egoists, and act as egoists on a daily basis, then why would a government, built, run and funded by egoists, be altruistic in nature?

In short: there is no way to make the argument that government could make a difference for the better in our lives, unless we by "for the better" mean organized egoism. That, in turn, is tyranny by definition.

Alternatively, the statist could abandon the Rawlsian idea of rational egoism and claim instead that man is compassionate by nature. Therefore, he would argue, government will also be compassionate and we will gladly support tax-funded programs that provide for the poor and needy. Even more: we will gladly support programs that redistribute income and wealth toward the goal of eliminating the economic differences between individuals.

However, as Nozick points out: if we are compassionate by nature and generally behave according to self-interested – not egoistic – principles, then we have no need for government. The case for the large state is self-defeating regardless of its point of departure, i.e., its perception of human nature.

That said, it is important to note Nozick's use of the word "generally". He does not see human nature as perfect; one of our flaws is that our self interest may take over under certain, exceptional circumstances. Specifically, Nozick refers to disputes between individuals where there is some sort of economic gain to be had from its resolution. Here, Nozick says, we are prone to letting our self interest preclude a dispassionate solution.

As a remedy, Nozick proposes an independent arbiter function. To minimize the risk of corruption in dispute resolution, that arbiter must be a function of government.

If we generalize this point we have a government that is strictly limited to the protection of life, liberty and property. This is Nozick's minimal state, and a state that will under no circumstances redistribute resources between individuals.

Again, this is a philosophical argument on the proper role of government. In practice, and especially over the shorter term of public policy, government has a broader set of roles to fill. It is, simply, not possible to reform government as it is today, in the immediate image of the minimal state. The role that this philosophical ideal can fill is, instead, to help ask questions about priorities in existing government functions. The closer a function is to this ideal, the less interesting that function is for spending reforms.

In fact, in a situation where government is fiscally unsustainable – very much the case in Wyoming today – and we have a dire need for spending reforms, the image of the minimal state gives us two important policy rules to follow:

1. There are functions of government to protect and preserve at all cost; and
2. If we do not reform functions that are not compliant with the minimal state, we will spread the public purse so thin that even those functions will get hurt.

With these two rules in mind, let us proceed to actual spending reforms. The next installment will discuss Medicaid.

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*) Nozick, R: Anarchy, State and Utopia, Basic Books, 1974.