Herald-Mail columnist Allan Powell has devoted several recent op-eds to arguing for bigger, more activist government.[1] He claims that limited government as envisioned by the Founders and advocated by many people today is “obsolete” and can’t address the problems of the modern world.

Powell’s comments are sincere and thoughtful, and deserve reply. To answer him, we must understand limited government’s core principles: what it values, what it considers the proper role of government and what it considers private. We’ll find that limited government is quite capable of handling today’s public problems and that it’s the best form of government for a nation as diverse as the United States.

Limited government is based on the belief that human wants and needs are best satisfied through private, voluntary action. We each have our own values and personal beliefs, preferences and willingness to take risks in pursuit of our goals. Also, we each have specific knowledge of our own resources and opportunities. Every day, we use these values, preferences and knowledge to make countless personal decisions and tradeoffs to enhance our happiness.[2]

Our decisions often lead to agreements with others who, themselves, intend to increase their happiness. For instance, I have some money, which I like, but I’d also like a steak. The butcher has steak, but would like more money. We agree to a trade—some of my money for some of his steak—and we’re both made better off. People often call this “the invisible hand of the market,” but it’s really just the efficiency and effectiveness of private, voluntary actions.

Not all important human wants and needs can be satisfied efficiently this way. Sometimes voluntary actions are blocked or distorted by obstacles known as market failures. For instance, if I secretly dump my trash on my neighbor’s yard, I inflict a sort of market failure on him, forcing him to shoulder an unfair cost.

The role of limited government is to remedy market failures. Limited-government institutions such as property rights, common law and law enforcement discourage me from foisting my trash upon my neighbor. National defense, honest-dealing laws and environmental protection are other limited-government institutions intended to correct market failures.

But government intervention is risky. Even under the best circumstances — free of corruption, political manipulation and simple error — government policies take away individuals’ freedom to find alternatives that better suit their particular needs, values and circumstances. Many times, government intervention proves more costly than the market failure it’s intended to remedy. These problems are known as government failure, and to some degree government fails in everything it does.[3] Yet sometimes it’s worthwhile to shoulder the cost of government failure, while other times we’re better off letting the market failure be.

Limited government only intervenes in market failures when the benefits clearly outweigh the costs. To help ensure this, citizens hold rights that keep many of their activities private and voluntary, out of the reach of government. Citizens also hold rights to influence and dispute public policies; these rights include free speech, the right to assemble and the right to petition the government. When limited government does intervene, it chooses the least-invasive effective policies and it adopts and implements those polices as close to the people as possible—that is, it leaves local problems to local government, responsive to local citizens. With its power constrained and decentralized, limited government strives to protect private action as much as possible, increasing human happiness and protecting diversity while promoting a dynamic society and economy.

Beyond market failures, many small-government advocates support government provision of a rational, basic social safety net to assist the unfortunate. But that’s the extent of the role they see for government. From my perspective, that seems quite adequate.

Unfortunately, Powell and some other people today want a much larger, more interventionist government. Wittingly or not, they want government to restrict individual freedom, exacerbate market failures, weaken civil liberties, and force everyone to live according to imposed values and beliefs. They want this despite the many human atrocities and economic disasters that such governments produced over the last 100 years. That’s a topic for future columns.