The role of government: provider or protector?

Mankind, in the state of nature, is essentially and necessarily characterised by the powerful logic of freedom (John Locke, 17th century philosopher, in “Two Treatises on Government”). To preserve and protect this free state of being against threat, social entities or supra-societal institutions, such as government, developed. For human society to function efficiently and effectively, these man-created bodies must accept man’s primary state of nature as the only rationale and justification for their existence and not be in conflict with it. The primary role of government therefore, I believe, is to protect the freedom of individuals within human society.

When government becomes the provider, individual freedom is compromised. When government expands or extends its functions, it is at the cost of individual liberty. Government as provider is the rationale for a welfare state.

Sweden, a supposed model welfare state, was, between 1890 and 1930, a free market. According to Peter Stein, in Failure of the Welfare State, its annual per capita economic growth rate increase was 2.3% (USA 2.2%, Germany 1.8% and UK 1.3% between 1870 and 1913). In 1985, the rate declined to 2.0% (USA 3.2%, Germany 2.5%, and UK 3.4%) coinciding with Sweden’s transformation from a free market economy to a full-blown welfare system. The Swedish budget deficit grew from 1% of GNP in the 1970s to 14% in 1983. By 1985, its taxes accounted for 50.5% of GNP (38.1% UK, 37.8% West Germany and 29.2% USA), and its rate of economic growth was 20% below the average in industrial countries.

A negative result caused by a well-meaning government. Individual desire for self-upliftment from adverse socio-economic circumstances was deflated; a nanny-state mindset developed; queues formed for ‘free’ health-care and other government-provided services; private capital went flying to countries with less intrusive market policies.

“The rise and decline of the Swedish welfare-state”, a study by Sven-Otto Littorin (Ecofin, a Swedish based think tank), that chronicles the problems of state welfarism in Sweden, cites Theodor Kallifatides: “… it is in the interaction with others that man can define his freedom and it is from the interaction with others that he can receive happiness. This is why man has greater need of society than of the state. That is why the state fights society, irrespective of ideological starting points. The state wants subjects, a society consists of members.”

State welfarism conflicts fundamentally with the human instinct for freedom. Government as provider raises unrealistic expectations like those mentioned by Deputy President Kgalema Motlanthe (Sunday Times, 9 January 2011)
“People want houses, they want this and they want that. For free, for free! Where have you ever heard of such a thing?” “... you can’t have a situation in which half the population just simply says ‘here we are, it is your responsibility to give us houses; it is your responsibility to furnish those houses… to feed us… and to ensure that our children get their education free’.”

“Nothing is free, absolutely nothing… it is paid for from revenue collected from those who pay taxes.”

We need a new campaign involving civil society, he said, “to inspire people to be their own masters and change agents”.

Government should listen and make it clear that its role is not that of provider. The South African people will rise above their circumstances.

Governments like to be seen as the saviours of the needy. Vociferous lobbies obfuscate what really needs to be done. The taxpaying public are seldom made aware of the full implications of the policies advocated.

But, as protector of individual liberties, government’s role would be consistent with its original function.

Government should ensure that the rule of law prevails and safeguard the principles that enhance individual liberty, such as the separation of powers between the judiciary, executive and legislature; individual sovereignty; limited government; checks and balances within the wider state; equality under the law; protection of private property; personal choice; freedom of association; freedom of speech. Fortunately, many of these principles, conceived to limit and curtail the powers of government, are explicitly enshrined in our constitution and simply require meticulous and consistent enforcement.

Belief that government should provide is the beginning of ‘The Road to Serfdom’ (Friedrich von Hayek). It is the road to state welfarism, the developmental state, which relies on redistributive policies that penalise productive individuals and business entities to transfer ‘wealth’ to the poor. All too often, government, apparatchiks and their associates dip their fingers into these taxed funds which sends us hurtling towards the road to perdition.

Cataclysmic unemployment rates, low economic growth, and disastrous public healthcare loom before us. A defeatist mindset that capitulates to populism is unwelcome. More government intervention, based on the false premise that government can create jobs and wealth, will not solve these problems.

Wealth is created by the private sector: the factory, the hawker, the township spaza shop. Their success creates real jobs. Governments consume wealth, creating ‘pretend jobs’ at taxpayers’ expense. South Africa’s challenges will not be overcome by government providing handouts to the poor, or implementing socially divisive racial quotas disguised as ‘demographic representivity’. They will be overcome when citizens, protected by government from force and fraud, can freely engage in uncoerced and voluntary exchanges. Once this happens, South Africa will leap from developing to fully developed, and all of its people will benefit.

The great statement by Rev William JH Boetcker, quoted in part by President Abraham Lincoln in one of his speeches, captures the philosophy that should guide governments:

You cannot bring about prosperity by discouraging thrift.
You cannot help small men by tearing down big men.
You cannot strengthen the weak by weakening the strong.
You cannot lift the wage earner by pulling down the wage payer.
You cannot help the poor by destroying the rich.
You cannot keep out of trouble by spending more than you earn.
You cannot further the brotherhood of man by inciting class hatred.
You cannot establish security on borrowed money.
You cannot build character and courage by taking away man's initiative and independence.
You cannot help men permanently by doing for them what they could and should do for themselves.

Author: Temba A Nolutshungu is a director of the Free Market Foundation. This article, which is based on a presentation to the Liberty Forum on Ideas for a Free Society, may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by members of the Foundation.

FMF Feature Article/ 22 March 2011

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