This past week we’ve seen two great national debates running side-by-side. First, the debate over the role of government that’s been raging since the beginning of the crisis has continued, most recently carried forward by David Brooks. The newer debate focuses on the kind of capitalism we want in America, and has been commented on by many in the last week, including the Post’s Jennifer Rubin and Steven Pearlstein and AEI’s Jonah Goldberg.
Obviously these two debates intersect a great deal – the type of capitalism we want helps answer when and where we should regulate and what type of safety net we should employ. Brooks makes an excellent point in his op-ed about the role of government in the economy:
“Does government encourage long-term innovation or leave behind long-term debt for short-term expenditure? Does government nurture an enterprising citizenry, or a secure but less energetic one?”
In “The Road to Freedom,” I offer my own take on the role of government:
“In his ﬁrst inaugural address, Thomas Jefferson laid out his vision of “a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government…
What philosophy of government preserves Jefferson’s ethos, while recognizing that the world has changed in dramatic ways? In my view, America would do well to turn to the wisdom of German-born economist and Nobel laureate Friedrich Hayek. Hayek’s classic book The Road to Serfdom, written in 1944, is obligatory reading for all advocates of free enterprise—and still provides an excellent guide to the role of government.
Conservatives admire and quote Hayek incessantly. What’s surprising to some is that he taught that the government, for moral as well as efﬁciency reasons, can and should provide a minimum basic safety net for citizens. And like most other economists, he also believed it should address “market failures.” But that’s all—and that is dramatically less than what the government currently does.”
Check out the role of government in one chart here.