All Commentary
Saturday, March 1, 1997

Perspective: The Role of Government in Society

What is Government's Proper Place?

Dr. Peterson, a Heritage Foundation adjunct scholar and Distinguished Lundy Professor of Business Philosophy Emeritus at Campbell University in North Carolina, is this issue’s Guest Editor.

Some time ago the Intercollegiate Studies Institute (ISI), now headquartered in Wilmington, Delaware, ran a series of student seminars around the country on the Role of Business in Society (ROBIS). I know, for I ran one at Campbell University in 1978 that featured free-market stalwarts like Walter Williams and the late Arthur Shenfield.

Surely the role of business deserves depiction and discussion. But so does, and I think more so, ROGIS—standing for Role of Government in Society, an acronym coined by Edward A. Prentice of the Mount Hood Society of Portland, Oregon, and Professor Fred Decker of Oregon State University. There are at least three key questions relating to that role:

Precisely what role should the state play in society, including the economy? How should that role tie into America’s concern over individual rights so magnificently framed in 1787 and ratified in 1791 as the Bill of Rights? And what of the principle of federalism embodied in the Tenth Amendment as:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people?

Overarching these questions is, I think, the nature of man and the admonishment of an angry Lord Jehovah who, on banishing sinful Adam and Eve, thundered down on them: By the sweat of thy face shalt thou eat bread. For suddenly the Garden of Eden and its boundless plenty were no more. Instead, productive resources, including time, were limited, sharply. The law of scarcity was in, starkly. Adam and Eve and their issue down to this hour faced—face—a life that Thomas Hobbes baldly said in his Leviathan (1651) was solitary, poor, nasty, brutish, and short.

So man, then and now, is in a fix, caught in a law of trade-offs. He can’t have his bread and eat it too. He must weigh unlimited ends against limited means. So Nature forces him to make hard choices on the correct construct of the state—as society’s protector or provider or both.

Life is about choices. In making economic decisions, individuals must choose among scarce resources that have alternative uses. They must try to conquer or, more accurately, lessen scarcity. But how?

How, indeed, when everyone is choosing from among the same scarce resources? Is this not a recipe for chaos if not bloodshed, the law of the jungle? Particularly in light of the condition of man, which Hobbes, for his part, saw as a condition of war of everyone against everyone?

But man’s lot is not war but peace—if with a proviso of a proper role for government: a system of private property rights, limited government, a state not as a coercive provider of goods and services but as a peaceful protector of life, liberty, and property.

From this construct, based on the original U.S. Constitution and Bill of Rights, emerged a system of free markets: a price system, capital investment, international trade, positive entrepreneurship. So the Founders unleashed Adam Smith’s mighty Invisible Hand—personal incentives under the rule of law driving this remarkable system of freedom and free enterprise, of social cooperation and international harmony, called capitalism.

Despite capitalism’s success, people often ask: Why is poverty so widespread within the nation and across the world? That’s the wrong question. For, as noted, man is born into scarcity; poverty is his natural condition. Adam Smith raised the right inquiry: Why wealth? Thus, An Inquiry into the Nature and Causes of the Wealth of Nations.

This inquiry—Smith’s much-overlooked title word—needs economic education, a widespread understanding of ROGIS, of how capitalism and the world work—an understanding, by the way, sought by Leonard E. Read, in a stroke of brilliant entrepreneurship, when he began The Foundation for Economic Education in 1946.

Ludwig von Mises, FEE’s academic adviser for more than 25 years, warned of boomeranging state intervention in Human Action:

All varieties of [state] interference with the market phenomena not only fail to achieve the ends aimed at by their authors and supporters, but bring about a state of affairs which—from the view of their authors’ and advocates’ valuations—is less desirable than the previous state of affairs which they were designed to alter.

The idea of ROGIS then is pivotal. Government is necessary, yes. But, as noted by George Washington: While government can be a helpful servant when limited, it becomes a fearsome master when unlimited.

Overextended government that reaches beyond the rule of law—fostering interventionism and the Welfare State—is an idea whose time never should have come. This issue of The Freeman explores, retrospectively and more so prospectively, government’s proper role.