“Government intervention never works but in fact prolongs and worsens the problems it is intended to fix.” Senator Rand Paul
I came across this quote recently while doing some research on Republican’s views of “The Road to Serfdom,” by Friedrich Hayek. Hayek is the intellectual forefather of much conservative thinking on government intervention into the economy. Paul’s statement was published in an essay he wrote for The Intercollegiate Review, a magazine for college Republicans. It is available on line at Rand Paul’s Challenge to Students. The essay is a year old, but it seems to encapsulate Senator Paul’s hostility toward the government.
So how accurate is Paul’s statement? Does government intervention make things worse? There is no doubt that government can often be ineffective and bumbling. We see examples in the paper every day. But does that mean that government only makes things worse when it tries to fix a problem?
Let’s think about a couple of examples here in the United States, to test this theory.
After the Second World War, President Eisenhower decided that the nation had a transportation problem, and he proposed a government program to fix it. The problem was that it was extremely difficult to drive from one side of our country to another. Eisenhower had recently commanded a military force that pushed from the shores of France deep into Germany, and done much of that on Europe’s road system. Eisenhower decided that the United States needed something similar, and proposed our interstate highway system. This system is now fully built. Did it worsen the problems of national transportation?
There’s no doubt that highways have created a bunch of unanticipated problems. These range from expanding urban sprawl to the demise of small towns as commerce moved to the nearest Interstate exit. But did the government intervention into the national transportation system “prolong and worsen the problem it intended to fix” as Paul flatly states. Nope, not even close.
Here’s another example. During the creation of the nation the founders felt that it was important for the government to establish a system to protect inventors and creators, to allow them to profit from their creations as a way to spur innovation. And so they included a provision in the Constitution, and Thomas Jefferson established the United States Patent Office. Did the patent office “worsen the problem it was intended to fix”? Not even remotely. The United States has the most dynamic and innovative economy in the world, largely because of the way we protect intellectual property.
But clearly these aren’t the kinds of things that Paul and other conservatives are talking about when they condemn government action. Mostly they’re talking about welfare and economic regulations. So, do these programs make things worse? It’s hard to analyze if you only focus on this country, but far more clear if you look at all the nations of the world.
Put simply, those nations with robust welfare systems have far less poverty than those nations that don’t. Just compare Western Europe with South America, or Africa. And well regulated economies are far more productive than lightly regulated economies. Compare the OECD countries (the 20 richest countries in the world) with most of the rest of the world.
Obviously there are outliers. There are a few remaining communist countries, like Cuba, Burma, Cambodia, and North Korea, and their economies are in shambles and their people in poverty. Clearly total government control of the economy as a means to ameliorate poverty does not work. But modern Western economies, with sensible regulation, are doing extremely well.
I’m sure conservatives will say I’m cherry picking positive examples, or creating a straw-man argument. But Paul said “government intervention never works.” He didn’t qualify it. I’m just holding him to his own words.
One of the knocks against Conservatives is that they are clueless about history. But they don’t seem to know much about the modern world either. Are they really unaware that countries without welfare systems are third world nations mired in poverty? Don’t they realize that countries without effective governments are chaotic failed states? Don’t they ever look at the world and see that countries with welfare systems have far less poverty than countries that don’t? Or don’t they see that the economies of the richest nations are regulated, while unregulated economies are pathetic?
I think that there are at least two causes to this problem. The first is that Fox News doesn’t do much international reporting. So Senator Paul doesn’t ever learn what goes on in the rest of the world. And he knows that his supporters don’t know either, so he can get away with making these statements. The other problem is the idea of American Exceptionalism, which allows conservatives to ignore the lessons from rest of the world. But the rest of the world exists, and it can teach us many valuable lessons. And one of those lessons is that government can fix problems.