May 15, 2020

A Limited Government is a More Effective Government

One reason why the federal government has failed in its response to the pandemic is that it is trying to do too much
Veronique de Rugy Senior Research Fellow , Daniel M. Rothschild Executive Director

This article is part of a series titled "Liberalism After Coronavirus." The purpose of the series is to give different authors an opportunity to explore the future of liberal values through the lens of the pandemic. 

For years now, liberalism has been under attack from all sides. Nationalism has been resurgent on the left and the right and the hard-learned lessons about government central planning of the economy and the distributed nature of economic knowledge are rapidly being forgotten.

Amid these challenges, it would be a tragic mistake to look at the current pandemic and see that it somehow disproves liberalism or the utility of liberal institutions, much less that the coronavirus is somehow a brief against freedom and limited government. It is certainly a brief against ineffective government. But pace Mark Lilla’s recent essay, the response isn’t to cut us off from the world or to accept as desirable a more overbearing, intrusive state.

First an area of agreement (somewhat). Lilla writes, “What really matters with democratic governments is whether they are strong, effective, responsive, and accountable, not how big they are.” But where we part company with Prof. Lilla’s views is on the scale and scope of the state. Instead, we believe both as a normative and empirical matter that governments with limited mandates are more likely to be effective at doing the things within government’s unique purview, such as addressing global threats and public goods. Indeed, the reason that the American government has—let’s call it for what it is—failed so spectacularly during the COVID-19 crisis is that it has strayed far from its area of competence.

Paul Krugman famously remarked that the federal government is “an insurance company with an army.” That is true in part (though the insurance company is insolvent!), but it obscures the real truth. In the past century, the federal government has increasingly become involved in many minute details of our lives. Our regulatory state has mushroomed uncontrollably; regulatory growth since 1980 has reduced our annual output by a quarter. Our immigration system is broken, our justice system plagued with iniquities and inequities, and our government’s information technology services are unable to complete even the most trivial tasks.

We now find ourselves in a situation in which our federal government is quite large—but not particularly effective at many of the myriad tasks it has taken on. The prescription then is not simply to try to, somehow, make a behemoth $4 trillion-plus institution more “accountable.” Instead, we need to separate the wheat from the chaff so that the government can effectively focus on what it should be doing.

And what should it be doing? There may be disagreement on specifics, but addressing communicable diseases is surely near the top of anyone’s list. Here, not only did the CDC dramatically fail in its handling of the coronavirus outbreak, the FDA and various other regulatory agencies proved so sclerotic and hidebound that they were simply unable to keep up with the flurry of innovation from scientists and biotech innovators or to coordinate effectively with the myriad other federal, state, and local government agencies with responsibility for the response.

None of this was due to a constitutional “fetish” as Lilla suggests. America’s greatest failings, both moral and practical, have come about when we departed from the constitutional vision of the Founders—which we’ve done often. The Constitution is unambiguously a “glorious liberty document” in the words of Frederick Douglass, and fetishizing liberty is no vice.

Lilla’s claims about globalization are likewise mistaken. Yes, the international order is imperfect, but on balance, economic liberty, global trade, and the internationalization of ideas have by far done more to stop global misery and poverty than has any other system. Yes, China has not joined that international order and adopted liberal values and democracy as many predicted a decade ago, and, yes, it maintains a gulag archipelago reminiscent of the worst abuses of Soviet totalitarianism. But the international economic order is far from being a threat to national self-determination (a deeply flawed and utterly illiberal concept) and blaming it for our problems merely deflects blame from our own internal political pathologies.

The question is not whether we have achieved, at any point in time, an optimal outcome; that criterion itself is epistemically non-sensical. Rather we should ask whether the imperfect institutions and policies we have in place are likely to move us in a positive direction. The matter is one of comparative systems. Beware the Nirvana Fallacy!

In that regard, the challenge facing liberals today should be to preserve and defend these institutions—including limited government and individual liberty—that are more likely to promote better outcomes. Here, we will make our stand with the liberal order.

We have no quarrel with the claim that we should greatly improve the effectiveness of American government. But success on this front requires greater focus, not greater breadth.

Such success requires also that we reject Prof. Lilla’s proposal that we retreat from globalization. Contrary to Prof. Lilla’s suggestion, what most surely and completely “puts American economic interests first” is a policy of unilateral free trade and more open immigration. The historical record in this area speaks clearly: a country’s economic success is tied positively to its embrace of free markets – of markets open to innovation and creative destruction and not poisoned with the arrogance of economic nationalism. That a more complete return of America to these liberal policies would also redound to the well-being of non-Americans is, of course, a major plus.

We would welcome a pivot to a government more focused on the few tasks that governments are best qualified to perform. The current COVID-19 crisis itself reveals just what these few tasks are. Policymakers would do well to listen to the wisdom of Dr. Charles Winchester of the 4077th M*A*S*H: “I do one thing at a time. I do it very well. And then I move on.”

With every challenge and tragedy, there are those who argue, along with Prof. Lilla, that the American constitutional order and liberal economic values are insufficient to the moment. Yet these predictions always prove incorrect. The genius of a limited constitutional order (albeit imperfectly applied) and a market economy (not just within our borders but across them) is their ability to experiment, innovate, and self-correct. Even in a crisis—especially in a crisis⁠—we abandon these core institutions at our peril.

Photo credit: Howard Chandler Christy / Public domain

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