Monday, October 15, 2012

"Getting Government Out of the Way"

Something I've noticed more and more among some people is the belief that "government needs to get out of the way" or that we ought to "leave it to the private sector" or to the states, regardless of what "it" actually is. This, I think, is representative of a broader intellectual flaw among Tea Party-types in the GOP, who seem to believe that anything the government does must be inefficient and bad, simply because it was done by the government. Now, don't get me wrong, there are plenty of examples of government waste and inefficiency, (farm subsidies, anyone?) but blanket statements like this don't do us much good. If I were to hazard a guess, I would say that the Tea Party wing of the GOP believes this because they also believe that government is only in the business of redistribution of income, ignoring the fact that the government provides public goods that undeniably contribute to economic efficiency.

To be sure, the government does redistribute, but you would be mistaken if you believed this was all the government did. We don't have a government simply for that reason, we have it because it can provide certain things that the private sector either will not or cannot provide at all or at optimal quantities--things like police, firefighters, research, national defense, courts, infrastructure, schools, etc. These are public goods, and when you think about it, public goods are arguably the whole reason why we have a federal government in the first place. 

As an example, imagine that a private company provided a road connecting two cities. The company's benefit from building this road is derived from whatever profit it can get through tolls and such. By contrast, the benefits to society are a good deal higher than the amount they pay for the use of the road, because the road is so instrumental to facilitating things like commerce and travel. Put simply, what this means is that because the private firm's benefits are lower than those of society, the firm won't build (provide) as much road as society would like. That's where the federal government comes in with road-building: it provides a useful, continuous network of roads and highways that spans the nation.

Yet today, we see many in the Tea Party and its associated off-shoots denigrating infrastructure spending by the federal government as wasteful. To be sure, it can be wasteful and excessive, just look at Japan! But as I've already shown, it would be wrong to assume that the private sector would provide the optimal level of infrastructure either. The only real way we're going to get the optimal level of infrastructure is if we make the government work optimally, not by retiring ourselves and our minds to the intellectual dustbin of boilerplate statements.