“The issue of government,” said Franklin D. Roosevelt, “has always been whether individual men and women will have to serve some system of government or economics, or whether a system of government and economics exists to serve individual men and women.” In current political discourse, the raison d’être of government and the economy has been lost.
At its simplest, an economy exists for the creation and distribution of wealth. In a capitalist economy, the act of working is nothing more than a generative act resulting from the sale of labor for wages. The beauty of capitalism is its elegant simplicity. It rests solely on self-interested cooperation rather than any convoluted ideas of altruism. As the father of capitalism, Adam Smith, said, “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest.”
A government is instituted to protect the rights of its citizens from foreign and domestic threats. Liberty is an intoxicating draught. Government ensures that we do not become drunk on liberty to the detriment of cooperative society. As Roosevelt said, “The exercise of the property rights might so interfere with the rights of the individual that the government, without whose assistance the property rights could not exist, must intervene, not to destroy individualism, but to protect it.” Capitalism is a marvelous system, but it is not a perfect system. The government has a duty to its citizens to protect them from the abuse of property rights.
Rational self-interest can lead to undesirable outcomes. A good example of this is the tragedy of the commons. Imagine a communal grazing pasture that is used by various shepherds but owned by no individual. If each shepherd were to act in his self-interest, he would increase the size of his flock. But if each shepherd made this rational decision, then the pasture would be overgrazed, and each shepherd would lose. No individual shepherd can take the initiative and decrease his flock because the other shepherds would have no incentive to do the same. There must be a binding hegemon who ensures that all the shepherds reach an agreement and abide by it.
Libertarians cannot abide the thought of a hegemonic government regulating the market. They believe that capitalism is self-regulating, and to an extent it is, but not entirely. Laissez-faire capitalism is built on the erroneous assumption that people are always informed, and will therefore know a good deal when they see it. The complexity of production is simply beyond the comprehension of most consumers.
How can one know where his or her steak was processed or whether his or her car is safe? Businesses in a capitalist system have no incentive to care about the environment and consumers apart from how they affect profits, and major corporations have the power to obfuscate their dishonesty. It was just revealed that Volkswagen had been lying for years about its cars’ emissions standards.
It is understandable why businesses would seek to cut corners. Consumers simply face too many distractions; businesses must find new ways to entice shoppers. As John Stuart Mill wrote, “Success, in so crowded a field, depends not upon what a person is, but upon what he seems: Mere marketable qualities become the object instead of substantial ones, and a man’s labour and capital are expended less in doing anything than in persuading other people that he has done it.”
Libertarians want to limit the government to a police force and a court system, but these structures are reactive in nature, which means that harm cannot be prevented, only redressed. In Victorian England, houses were lit by gas, which could not be shut off, and therefore it had to be lit constantly. There was a common practice among gas suppliers to reduce the flow of gas at night when few people would need light. This seems like a good way to cut costs, but the problem is that sometimes the reduced flame would blow out in the night, allowing gas to fill the home, suffocating the sleeping residents. What good is a court system to the dead?
Businesses are not accountable to people, governments are. More regulation does not necessarily lead to despotism and liberticide. A. G. Gardiner wrote, “I shall not permit any authority to say that my child must go to this school or that, shall specialize in sciences or arts, shall play rugger or soccer. These things are personal. But if I proceed to say that my child shall have no education at all, that he shall be brought up as a primeval savage, or at Mr. Fagin’s academy for pickpockets, then society will politely but firmly tell me that it has no use for primeval savages and a very stern objection to pickpockets, and that my child must have a certain minimum of education whether I like it or not. I cannot have the liberty to be a nuisance to my neighbours or make my child a burden and a danger to the commonwealth.” Likewise, no person or business has the right to commit harmful actions, and it is the government’s duty to prevent harm before it is done.
