Wednesday, September 15, 2010

When Does the Path of Government Intervention Become a "Road to Serfdom"?

The usually thoughtful David Brooks, who seems to be on a quixotic mission to restore "moderate Republicanism," has a fine column in this morning's New York Times (here), in which he attempts to find some middle ground between the "all-government-is-bad" rhetoric of current leaders of the Republic Party and the more sensible (but still contestable) argument that small government is likely to be better (e.g., more effective) than big government. To that end, Brooks recounts the effective use of government policies to improve the national economy by Presidents from Washington to Lincoln. Assuming he is correct about examples he chooses, Brooks fails to answer the crucial, and perhaps unanswerable, question: How big should government be? Put differently, where does worthwhile government policy end and the "road to serfdom" begin?  

When he was asked that very question several years ago, the Nobel laureate Ronald Coase reputedly provided the following ambiguous answer that rightly highlights the complex nature of the problem: It's like asking how much a 500 pound man should weigh; the answer is certainly not zero, but less.

Even though he does not - and could not really be expected to  - tell us how and where to draw the line between too little and too much government, Brooks makes a very important point about the drawbacks of vilifying all government as evil. Instead of focusing on the size of government, policy makers would be better served to restrict their fights to the qualities of alternative government policies (always including the do-nothing policy).

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