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Saturday, December 1, 2007

The Real Argument about Government

Collectivism versus individualism.

A lot of contemporary political debate centers on how big government should be. The debate tends to have two main features.

First, it uses measures such as government spending as a proportion of GDP or the share of total income taken in taxation. Figures such as these show a dramatic rise in the size of government during the twentieth century.

The second element concerns how much economic activity, broadly defined, the government should undertake, whether directly or indirectly. Here there has been a shift in focus in recent years. Until the later 1980s it was often argued that a large part of actual production should be directly controlled by government through the “public” ownership of productive assets. That argument is now seldom heard. Instead we hear that government should intervene in the distribution of income and should provide, or at least fund, key services such as health and education.

All this is very familiar. What we may not realize is that the contemporary debate concerned only a part of a larger, more general argument. Moreover, while debates about the nature and appropriate role of government have been going on since at least the 1760s, the one described above, with its focus on measurable size and the government’s economic role, has only really been a feature of the last 120 years or so. It began originally with the transformation of public administration during the nineteenth century and the rise of socialism and modern theories of economic management toward the end of that century and during the early twentieth century. Before then the debate was much wider ranging and was concerned with more fundamental issues having to do with the very nature of government and the relation between the individual and society. We may define this earlier and more fundamental debate as one between individualism and collectivism.

The crucial point is that the size of government, as defined above, is not the same thing as its scope or extent. The wider and more basic question is: what should the range or scope of government be? What areas of life should be of interest to government and the subject of collective choice, and which areas should be purely private and a matter of individual, personal choice? It is perfectly possible to have a government that is active and concerned with a large part of human life and yet is small in terms of its share of GDP. The main reason why contemporary governments are so large is not just because their scope has grown but also because the areas they have become involved in require employing large numbers of people, which is costly. The fundamental choice is between a government that is concerned with only a small part of human affairs and one that is concerned with a large part. In the second case there is a further choice between an extensive government that is large in terms of the resources it consumes and one that is extensive and active but small. (The fourth possibility, that of a government that is restricted yet large, is unlikely.)

Public as a Whole

The debate started with the appearance of a new way of thinking about government that appeared in Europe following the Treaty of Westphalia in 1648 and more particularly in the years after about 1740. Its main exponents came from the German-speaking parts of Europe, although they also drew on the ideas of French thinkers. Known collectively as Kameralists, their argument was that rulers and governments should be concerned with the interests of the public as a whole rather than their own personal interest or that of a small group. They saw government as having three main aspects. The first was public finance, the funding of the state. The second was “oeconomy,” which meant more than what we now call “economics.” It implied that the whole political society was like one large household, with government aiming to run its affairs in an orderly manner and to maximize the wealth and prosperity of the whole by direct action. The third was “polizei,” or public policy. This meant that governments should be concerned with anything and everything that had a bearing on the well-being of the public, from health to education to morals to security.

The All-Embracing State

The implications of this way of thinking were profound. It meant that in theory any part of life was a proper concern of government, from the kinds of clothes people wore to the way they brought up their children. Above all this was a collectivist approach that saw society as a collective whole rather than seeing the individual as primary and society as the product of the interactions of individuals. This meant that human flourishing was a collective good rather than an individual and personal one. It meant also that the whole (the nation or society) was an entity with a real existence and real interests, which were prior and superior to the existence or interests of the individuals who comprised that whole. The logical conclusion was that, if necessary, the interests and desires of individuals could be properly sacrificed to those of the whole.

The Kameralists and others did not favor anything like socialism. In fact they were strong supporters of private property and markets, but on the grounds that they served the collective interest.

These ideas became the orthodoxy in most parts of Europe during the latter years of the Ancien Régime and, if anything, became even more influential after the French Revolution and the rule of Napoleon. However they also provoked a response from thinkers such as Adam Smith and Wilhelm von Humboldt. The latter’s major work, The Sphere and Duties of Government, was a direct response to Kameralist ideas as found in his native Prussia. (Paradoxically, in his capacity as a civil servant he was a major practitioner of the ideas he opposed, particularly in the sphere of government-run education.) The ideas of the U.S. Declaration of Independence can also be read as an attack on this view of government. This alternative view, which was perhaps best expressed by John Stuart Mill, is that individuals were primary and were the best judges of their own interests, that each individual had to pursue his own personal and distinctive kind of happiness, that consequently government was the servant of individuals and should exist only to enable people to pursue happiness by providing a framework of impersonal rules, and that each individual should have a large and extensive sphere of personal autonomy. In other words, personal choice rather than collective choice should be the default position.

This division between a collectivist view that led to an extensive role for government (but not necessarily a large state) and an individualist one that led to a highly restricted and diminishing role was at the heart of political argument in most of the nineteenth century. Both sides triumphed in some areas and lost in others. Thus religion was moved from the public to the private sphere, a huge victory for the individualists, while education became a central government responsibility. With the rise of socialism the argument came to focus specifically on government’s role in narrowly defined economic matters.

Since 1989 we have reverted to the older argument. We are now bombarded with assertions that the lifestyles, diets, childrearing practices, and cultural choices of people are the proper concern of politics and government. The kinds of arguments made by Kameralists are once again the staple of many of our public intellectuals and politicians. Time to dust off those copies of Humboldt and Mill and make the case for individuality and personal autonomy.

  • Stephen Davies is a program officer at the Institute for Humane Studies and the education director at the Institute for Economics Affairs in London.