For three reasons a night watchman state – a state in which government supplies only a police force and a military charged with preventing and redressing violent crimes (murder, theft, rape, assault, etc.) – is preferable to the alternatives.
I. The market is, not just more efficient, but also better at alleviating poverty
The first consideration in favor of a night watchman state is that the market is a better mechanism for both allocating and creating goods and services than is the government. Thus, the state ought to be in the business only of safeguarding the preconditions of a market, chiefly physical safety (though it is also possible that various informational safeguards – the prevention of fraud, for instance – are necessary). This is what the night watchman state does.
The market is better than the state at creating goods and services because people are more motivated to work and innovate the more profit work and innovation yields. The market promises that the more desirable a product you create, the more money you will get. If the state engages in reallocation, there is no longer that guarantee. Or, more precisely, there less expected return for work and innovation the more interference there is in the market. Concomitantly, there is less incentive for productive activity.
The market is better than the state at allocating goods because it reliably reflects both supply and demand, channeling goods and services to their most highly valued use. And this fact explains why the market is better than government for the poor. As the most highly valued use for goods and services is often in producing new and more valuable goods, maintaining an unregulated market also leads to increased employment opportunities and, thence, to increased employment. A rising tide lifts all boats may be banal, but it still states a truth.
II. The state is particularly bad
The second consideration in favor of a night watchman state reinforces the first. Not only is the market better at allocating and creating good and services than is an efficient redistributive state, but the state is also horribly inefficient. There is no guarantee that the ostensible policy goals of a state will match the goals of the real people that constitute it, and so no guarantee that the state will pursue its idealistically appealing program. Politicians care about winning elections; bureaucrats care about safeguarding their (and their bosses) prerogatives.
Because of widespread and rational political ignorance, politicians are not held accountable to the electorate when they implement policies other than those they promised. Bureaucrats aren’t accountable to anybody* except, arguably, the industries to which their agencies are connected by a revolving door. Thus, politicians and bureaucrats will respond to the demands of a few powerful interest groups, as opposed to the interest of their constituents as a whole – the policies they actually pursue will not match the policies they publicly endorse.
* Recall what John Kennedy once told one of his constituents: “I agree with you, but I don’t know if the government will.”
Finally, it is true that the market only allocates, and incentivizes the creation of, goods and services that people actually want. The market is not an efficient mechanism for satisfying (i) massively idiosyncratic desires, such as the desire for what currently airs on Public Television; and (ii) what we might term systemic desires, such as the desire that everybody refrain from smoking, or buy health insurance, or not be racist, or work no more than thirty five hours a week. Arguably, however, some desires that fall into one, the other, or both of these categories are rational, i.e. are desires for desirable states of affairs. There is thus a prima facie case for government intervention.
Two points. First, to recur to some observations made in section (I), many of the systemic desires would be more or less satisfied by the market. For example, racism does not pay as it categorically precludes a class of good employees and consumers. Competitors – moneyball-style – will exploit racist firms’ irrationality and reap greater profits. The same likely holds for health insurance. If we remove the powerful incentive against purchasing health care offered by the fact that our hospitals give emergency care to judgment-proof invalids, purchasing health insurance will be in more peoples’ best interest, so more people will do it. And those that lack the information necessary to make the calculation that it is in their best interest are a great market for health insurance providers to tap!
It would, of course, be facile to say that the market will more or less satisfy all systemic desires. The thirty-five hour work week is one example of a systemic desire that the market likely won’t satisfy. But this is no objection even if such a desire is rational.
Human beings have equal moral autonomy. This means that each of us has a right not to be coerced into enacting another’s pet mode of social living. Systemic desires are, in effect, desires for a particular mode of society. There is nothing wrong with pursuing them by trying to mobilize voluntary action, but it is impermissibly autocratic to say my desire is more important than yours, so I’m forcing you to help satisfy it.
The market is more efficient at creating and allocating goods than even a reasonably well-functioning government – and market creation and allocation leads to more employment, and thus less poverty, than government intervention. Further, government is rarely all that well-functioning owing to the mismatch, diagnosed by public choice theory, between ostensible policy goals and the actual goals of political agents. Finally, while it is true that the market cannot satisfy every desire (idiosyncratic ones and systemic ones, particularly), it is not permissible – both disrespectful of our equal moral autonomy, and autocratic – to pursue those desires by coercively preventing others from pursuing their own.
Therefore, because the purpose of government is to protect rights and provide services, and because the market is better than the government at the latter, it follows that the night-watchman state is preferable to the alternatives. It enables the market and protects rights.
Did I pass my Ideological Turing Test? (:
(If not, what gave it away?)