What is Limited Government?

Before you start reading, this post may irritate you if you’re a libertarian. so take this as a warning. But, as a libertarian sympathizer,1 all I’m really doing is playing devil’s advocate. Rather than me making a point, interpret this post as a set of challenges (questions) that invite your answers.

One of the most ambiguous terms in the libertarian lingo is “limited government.” What’s meant by the word “limited?” If it means constrained, well, all governments are constrained to one extent or another. Of course, some governments are more constrained than others, and in different ways. When a libertarian uses the term “limited government” she probably has in mind governance more limited than the modern-day welfare state democracy. Still, what exactly does this mean? What should we limit, and by what rule and/or process will society decide where to limit and where to extend the power of government? As a liberal, I contend that the limits on government are emergent phenomena, in part decided through reasonable public debate. I think the implications of this may upset certain libertarian designs.

Let’s approach the problem from a basic public choice angle, as introduced in Buchanan and Tullock’s The Calculus of Consent. The idea in Buchanan and Tullock (1962) is that a group of individuals can agree to a constitution that dictates the rules and process of political decision-making. On this basis, they divide the problem of collection action into two stages: the constitutional level and the operational level. The latter is the day-to-day decision-making a government will make. Allowing for disagreement on policy at the operational level, by agreeing to a set of rules (a constitution) society then use a process to settle political disputes. Since political preferences are heterogeneous, disputes at the operational level can be resolved through trade, such as vote trading (if you vote for A, I will vote for B). This, it should be clear, is an abstract theory that describes an ideal.2

The explicit assumptions I’m making are,

  1. If there are things that can be solved through collective action with relative efficiency, a group of people have an incentive to form a government;
  2. Knowing that there will be disagreement over specific policies, this group of people can unanimously (or near unanimously) decide on a constitution, which defines a set of rules that decide decision-making at the operational level;
  3. In exchange for policies you support, you will accept the external costs of policies you disapprove of.

There will be policies legislated that you disagree with and they come at a cost to you. But, governments can be organized in a way such that only a small minority of people actually participate in the decision-making: representative governments. For example, (this is from Buchanan and Tullock [1962]) a bicameral legislature, where the voter sets for members of one house will be different from their respective peers of the other, will be closer to unanimity than a government without one, all else equal. As the institutions of governance become more complex, the average person loses track of the individual exchanges, so that you may not realize that the burden you suffer is in exchange for some benefit you enjoy. Instead, you may see only the injury. Suppose that we know our current institutions are imperfect. As scientists, how accurately can we judge between perfectly inclusive policies (those that would exist under unanimity) and partially (or completely) externalized policies? Rephrased, if what we’re interested in is a pluralist society, how can we claim with any certainty that, for example, “wealth transfers to the poor” is an imperfectly inclusive policy?

Typically, when someone defines “limited government” they restrict the scope of the state to national defense, currency control (i.e. if you think money is a public good), and/or justice. The exact definition may vary on what set of services are categorized as public goods. But, that’s the thing. There’s reasonable disagreement over what service is a public good, and there’s reasonable disagreement over how to best solve the public good (including the option that the cost of collective action is too high). These disputes have to be settled through a pluralist decision-making process, and the ultimate product will differ by some degree from your ideal. The limited (perfectly pluralistic) government of the real world will provide goods and services which are, at least partially, different from the set you would prefer. It may be the case that the real world limited government is larger than your ideal (a larger set of public goods is provided for).

In summary, I have two challenges for fellow libertarians (or liberals with libertarian preferences).

Challenge #1: When judging collective decisions, do libertarians suffer a fatal conceit? The more complex political exchange is, the less the average person understands the system as a whole, and therefore the less able we are to know which, or how much of a, policy is non-inclusive.

Challenge #2: In a perfectly pluralistic society, is it the case that a public with reasonable disagreements may ultimately decide on a government that differs from each individuals’ own ideal?

What I’m interested in, though, is if libertarians should start thinking about that margin of error in their judgment. For example, how unreasonable would it be to believe that progressive redistribution would exist in a perfectly plural society? I can think of a strong public goods argument for progressive redistribution of wealth. If in the day-to-day decision-making we come to compromise over disagreements, we may end up adopting policies that we disagree with for the sake of pushing legislature we agree with. Doesn’t this mean that the freest (voluntary governance) society could very well have a welfare system? Or, be responsible for certain infrastructure investments? Now, what the institutions of this government would look like is a completely different question. Maybe we’ll see greater competition between governments, if, for instance, territorial boundaries begin to lose relevance (greater cosmopolitanism). I don’t think this last question is answerable anyways.



1. I made the term “libertarian sympathizer” up. I consider myself, first and foremost, a liberal, in that I support governance that approaches unanimity as much as possible. What unanimity means is that everyone’s opinion counts in collective action. But, I support a set of policy prescriptions that is broadly libertarian — free banking, limiting the size and scope of the military, ending corporate welfare, et cetera. I just don’t think these policies are the ones that should be implemented over all other policies: these things should be up for public debate, the only liberal position.

2. As Buchanan and Tullock wrote,

The relevance of the contract theory must lie, however, not in its explanation of the origin of government, but in its potential aid in perfecting existing institutions of government.

— James M. Buchanan and Gordon Tullock, The Calculus of Consent (Indianapolis: Liberty Fund, 1999 [1962]), p. 319.

13 thoughts on “What is Limited Government?

  1. Ryan Long

    To me, more and more, the issue is not any of this stuff, but rather: when do we get to the part about liberty?

    When I was 17 years old, I developed a curiosity in libertarianism, and when my father heard about it, he told me this: “I always liked the idea of being a conservative on economic issue and a liberal on personal issues, but every time I hear the Libertarian Party speak they’re asking for things like allowing space aliens to use public parking spaces.” It took me about 15 years to see his point, but now I get it.

    We shouldn’t be talking about whether the welfare state should exist. We shouldn’t be talking about whether collective decision making should follow pattern A or pattern B.

    Instead, we should be talking about ending drone strikes and phasing out the TSA. Libertarians need a more realistic perspective. I’m for getting rid of the income tax, sure, but it ranks far below the police state in terms of things I would like to be changed before noon tomorrow.

    If someone started something called the “Hey, I Have An Idea: Let’s Not Shoot Kids Even If They’re Suspected Criminals And Let’s Stop Letting The TSA Take Nudie Photos Of Us At Airports And While We’re At It Let’s Not Send Young People To Jail For Decades At A Time Because They Smoke Marijuana” party, then it would instantly win the next election, and every subsequent election after that.

    In short, i am honestly tired of debating the welfare state and whether taxation is theft. I would like to move toward tangible freedom.

    1. JCatalan

      Definitely. I think we should distinguish between libertarianism as a political philosophy and libertarianism as a political platform. I don’t think there’s much of a case for the former, but there’s a case for the latter. If we think that immigration essentially unrestrained, the war on drugs should be ended, the TSA should be ended, et cetera, we have all the right in the world to sell these ideas through public debate. This is how we inform the process of political change. My point, though, is that we’re going to have to compromise in certain areas, and so we can’t build a political philosophy that takes the libertarian political platform as the ideal.

      1. Ryan Long

        I think the Rothbardians reject all compromise because it involves tacit (or maybe active) acceptance of the state. They don’t wish to participate, so I guess their answer would be, “No compromise!” like Rorschach from The Watchmen.

        I don’t see an inherent problem with compromise except that it is nearly impossible for an ideologue to compromise. For example, what is the value of conceding to an expansion of the Patriot Act in exchange for a liberalization of anti-drug laws? How could a libertarian weigh this sort of issue? Is it even possible to reach a decision and retain the “libertarian” label?

        Or, for example, on public finance: Is it possible for a libertarian to accede to a tax increase in exchange for a spending reduction?

        To be clear, I think individual libertarians could cook up some justifications for why choosing one or the other might allow them to retain their libertarian street cred, but that’s just rationalization. I take it you’re not asking about whether people can entertain the idea of compromise, but rather what are the points that libertarians as a collective can agree are okay to be compromised.

        The only libertarian compromise that I think really works is the really grandiose stuff: Like agreeing to a one-off spending increase in exchange for a balanced budget amendment; or, agreeing to the creation of a new federal agency in exchange for the elimination of three other agencies. Other than that, I’m not sure libertarian compromise is even possible.

        1. JCatalan

          I agree with you, which gets to the implicit points I wanted to make through the post,

          1. Short of imposing libertarian politics on dissenters, the real world ideal voluntary society is likely to look very different from what libertarians (the political platform) think it ought to look like;

          2. There is no libertarian political philosophy, there is only a liberal political philosophy;

          3. We should be careful to remember that when we say “this policy is oppressive” or “this policy wouldn’t exist in a perfectly free world” there is the chance that we’re overlooking that these policies do reflect close to unanimity decision-making and a result of political exchange.

          1. JCatalan

            Well, there would be a libertarian political philosophy if we imposed some libertarian view of what is right and what is wrong, and how government ought to be run. But, if instead adopt pluralism, this isn’t how things are ultimately going to turn out. We’re going to have to compromise. So the only real political theory is how to develop the best institutions possible for pluralist compromise.

          2. Ryan Long

            So if I understand you correctly, you’re suggesting that the libertarian philosophy, because it is individualist by definition, is therefore no longer “political” in the more literal sense of the word? That is a very interesting thought.

  2. Scott Gaff

    Truly a priori psychology plays a critical role in politics. Objects confirm to the mind, and not the other way around, as is made obvious in children art, where mountains and oceans are all drawn the same way no matter the experience—it’s pretty clear to me that Tiamat of the Sumerians and the world serpent of the Norse come from the a priori aesthetics of waves, like the Semitic letter mayim meaning water consisting of 3 waves, and serves as the basis for our letter “em;” the wave pattern of the loch ness monster’s form being a modern example.

  3. Scott Gaff

    i like where you went with this article, but political theory is not the same as politics-in-action. Why you’re so adamant in the benefits of Democracy, when it’s so clearly a failure because people–by in large–are failures says something (though you do agree it’s flawed, and i also wonder if a regress to monarchy is the best option). The majority of people that make up the aggregated average you refer to as unanimity are selfish, envious assholes projecting every manner of inferiority onto the hobgoblins of their own fanciful imaginations, altogether clueless as to its hypocritical nature. That’s the reason behind Ayn Rand’s virtue of selfishness, a rather embarrassingly botched (or should be to libertarians) attempt at reactionism.

    And i don’t think the assumptions you made are at all realistic due to political complexity, which you later do address, so never mind….

    Democracy has the collective intelligence of a kid with down’s syndrome. The bigger the group, it follows, the lower the collective knowledge. I think that’s what you were subtly hinting at in your devil’s advocacy, but i could be wrong.

    Also, I don’t actually care, because Democracy has already been inflated to it’s bursting point.

    1. JCatalan

      To clarify, I’m defending modern democracy with a caveat: that modern democracy is improvable (and that a better form of governance exists). My defense of democracy is basically that it may not be as bad as people think it is. But, democracy can exist with a variety of different institutions. The democracy Buchanan and Tullock have in mind as their ideal, for example, may differ a lot from how democracy works in the U.S.

      1. Scott Gaff

        democracy in theory is the same as the ideal of democracy (i do mean theory as an ideal, like Freud’s theorizing being a projection of his own wants. blinding his psychoanalytical theories).

        many people want democracy to be a simile for their own political party (mainly the political left in my experience, though it’s unfair to state since im sure most self proclaimed liberals realize democracy is apolitical). Democracy is an idea (internal object), not an external object anybody can claim for themselves.

        Since “nobody” knows anything, what guarantee do the left have that their bleeding hearts will benefit anybody. Theyre still good people regardless of the effsect, since most sincerely believe they’re helping the world and should be commended for that, but nature doesn’t care about a person’s politicized-empathy.

        i don’t mean for any of this to sound too cynical, but there’s a lot that can be said on the subject, both objectively and intersubjectively. like you, i find hoppe’s book on the subject far from being philosophically intelligent.

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