Jay Reding.com

Why Small Government Is Better For The Little Guy

Hardvard economist Edward L. Glaeser has a fascinating and provocative piece on what he calls “small government egalitarianism”:

In the 20th century, President Woodrow Wilson campaigned on a “New Freedom,” opposing Teddy Roosevelt’s big-government Progressivism. While Roosevelt wanted the government to manage monopolies, Wilson wanted trust-busting and less protectionism. Wilson perceptively noted the dangers of too much government: “If the government is to tell big business men how to run their business, then don’t you see that big business men have to get closer to the government even than they are now?”

Wilson’s warning could not be more prescient. Look at the “stimulus” bill snaking its way through Congress. It is positively loaded with pork for special interests, handout for big donors, and only a fraction of it will go to the sort of crucial infrastructure projects that were supposed to be its very purpose. The “stimulus” bill could not be a better example of why Big Government hurts the poor. Even setting aside the issue of whether government spending creates jobs at all, this bill certainly won’t put enough people to work to make even a dent in the skyrocketing unemployment lines. Instead, billions of dollars will go to the politically well-connected and unscrupulous. The difference between Bill Blogojevich and most of Congress is that Blagojevich got caught.

Small government is good government. Small government helps the American worker because it does not allow the kind of concentrations of power that we have now. Why do big corporations spend billions on lobbying Congress to tilt the law in their favor? Because Congress has the power to tilt the laws in their favors. The reason why the Founders deliberately created a limited government of enumerated powers is to prevent the kind of naked interest-buying that we see now. The more power you give the government, the more incentives there are for government to use their power for their own advantage.

With Congress’ approval at a historic low, the idea that the case for small government is no longer worth making seems absurd. If anything, now is the best time to push a vision for a government that is smaller, more responsible, and more accountable. That such a government would ultimately be more equitable is a beneficial side-effect.

Politically, the Republicans should be doing what Sen. McCain threatened to do and “make famous” every single pork-barrel project in the “stimulus” bill. The message here is simple: tens of thousands of Americans are losing their jobs every day and Congress is paying off its campaign contributors with pork. Americans should be disgusted by the performance of Congress right now. The myth that this trillion-dollar boondoggle is anything but a case of Congress acting like robber barons of old should be laid to rest. Congress wants to claim that they’re “creating jobs”, but instead they’re giving more and more cash to the same politically well-connected actors.

This is precisely why small government is so crucial to having a more equitable society. If Congress were only allowed to spend money on truly national projects there would be no ability to send pork to campaign contributors. Big Government does not produce an more equitable society, it rewards those who side with the politically powerful. Small government benefits the people because it doesn’t allow Congress to game the system to benefit their own interests.

Take a simple but common example. When new regulations come down from all the federal agencies, have John and Jane Doe on Main Street had any opportunity to shape that new rule? Of course not, even if they compulsively wade through each daily edition of the massive Federal Register to see what rules are being proposed the most they can realistically do is send a strongly worded letter. Can Washington interest groups shape that rule? They pay lobbyists great amounts of money to do exactly that. Can business interests shape that rule? Absolutely, and they have their own army of lobbyists for just that purpose. So is it any shock that John and Jane Doe are under-represented in the process?

It’s a myth that “big business” and powerful special interests love small government and hate regulation. Why should they? They have the clout in Congress to make sure that the regulation benefits them. They can use their political connections to steer millions of taxpayer dollars to them. They can benefit from the access they have to Congress and even the White House. They know that P.J. O’Rourke’s great maxim is correct: “when buying and selling is legislated, then the first thing to be bought and sold are legislators.” The bigger and more intrusive government is, the higher the barriers to new competitors. Look at the most heavily-regulated markets in this country: they tend to be dominated by a handful of large players who can use their access to lobby government to keep those regulations in place. They benefit the most from the regulatory state, and they have every interest in seeing Big Government stay big.

If you’re a little player, like a “Mom and Pop” operation, forget it. The costs of regulatory compliance are too high. If you can’t afford the lobbyists, you can’t play the game, and you get squashed.

That is why we need smaller, less intrusive, and more accountable government. We need to reduce the incentives for the big players to game the system and increase the chances for small players to enter the market. That way the benefits go to the best and the brightest, not the most politically well-connected.

Here is where liberalism fundamentally gets it wrong: government regulation of the market will never produce equality. It will only benefit the big players. If we want a more egalitarian and equitable society we cannot put in place barriers that keep the small players out. Glaeser is right, and the case for small-government egalitarianism is one that needs to be made now more than ever.

One response to “Why Small Government Is Better For The Little Guy”

  1. […] Reding has a good perspective on the matter at hand: Small government is good government. Small government helps the American worker because it does […]