Launching a Small Government Odyssey

I am about to begin an odyssey. You are invited to accompany me and to keep me from time to time from throwing myself under the bus. I want to think about what proponents call “limited government,” but which is, in fact, “small government.”

I realize that we have a federal system and that the government people have in mind when they call for small government is the central government. These people want the federal government to be smaller not, as a rule, because they want less governing going on, but because they want more of the governing to be done by the regional governments. There are various reasons that might be given for that, some quite ingenious, but we will pass them by just this once.

I am imagining that our system can be thought of as three related parts, as in the diagram.
Just what the रेलातिओंस are of each to the other will be the continuing investigation. I am going to be known as the guy who put the odd- in odyssey, I suppose, but it would by only an –yssey if it weren’t for people like me. For now, I want to suggest one rule for using the diagram and note a couple of implications.

This is the rule: in a well-ordered economy and society, the transactions stay where they are. The buyers and sellers and suppliers and manufacturers and the providers and consumers of various services either like the way things are being done or see no alternative. The adherents of various faiths or of no faith, the family members, the educators and the students, the husbands and wives, the members of various racial or ethnic groups and of various cultures also believe that things are as they should be or that there is no alternative.

In a society like that and an economy like that, we may think of the outer line of the oval as very thick. This line protects the people inside and constrains them as well. Two possibilities thin the outer wall that defines society and economy. Sometimes it seems that there really is an alternative. Sometimes people are really really unhappy with the way things are working out. Or, of course, both. When that happens, people place themselves, figuratively, outside the society or the economy and solicit the action of government.

Government is, in this way of looking at it, an appellate court. It really isn’t as bad as that because in a society and in an economy, there are no necessity that there be any losers. Arrangements can be reached in which everyone is either satisfied or not so dissatisfied as to launch an appeal. In a court, there are losers by definition and as a rule, if you lose and if you have the resources, you start looking around for a second opinion. You appeal to a “higher” jurisdiction.

Now government has its own work to do. It is not only a court of appeals. It has to protect the nation-state from enemies both foreign and domestic. It has to maintain public order. It has to enforce contracts and allow forms of organization favorable to the accumulation of capital, and so on. But government runs on authority and funding and if there is a government, there are people in the government who want more authority and more funding. So they can, you know, provide more “services.” And that’s where the appellate function comes in.

Losers in the economy can solicit the attention of the government and ask for help. Losers in the society can solicit the attention of the government and ask for help. As a rule, the people who are doing well in the economy and the society do not look favorably at the prospect of having their monopolies broken. “Sector knows best,” they will say, meaning only their own sector. The way to keep issues “at home,” i.e., within the sector where they arose, is to keep people from feeling like losers or to keep them from availing themselves of an alternative.

So, just to pick two suggestive examples, a health insurance company might raise its prices by 20% and keep their discretion successfully at home in the economy. If they raise them 200%, someone is going to appeal for governmental intervention. If you have a child with a rapidly progressing illness, you might say that you are faith healers and are relying on God to bring about health. That works sometimes in the sense that no one alleges child abuse and demands government intervention. If you said, instead, that you didn’t want to spend the money on the health needs of your child, there would be a governmental intervention and you would lose control over the child.

So one straightforward implication and I’ll let it rest for today. The people who are currently winning in their sectors would be wise to do whatever is necessary to prevent conditions from getting so bad that there will be an appeal to government. The appeal is the hope of the losers in that sector and even if it fails, it destabilizes the sector and makes a new deal seem possible.