Over at the Stumbling and Mumbling blog, the author asks this question, after watching an interesting TV programme about the sort of free market activities he sees going on in bits of Africa:
“Why is it that the societies that come closest to the libertarian ideal are poor ones, rather than rich? (It would, I think, be a stretch to argue that libertarianism causes poverty in this case). What is it about wealthier societies that brings with them bigger government?”
I think this can be fairly easily explained: as countries get richer, their voters think – naively – they can afford to have big government, at least until they start to hit those sort of problems that we have encountered in the West in recent decades with government overload. In the US, for example, the country became so rich, relatively, after the Second World War that things like the Great Society reforms, or the Space Program, were easier to contemplate and the risks and costs could be shrugged off, at least for a while. I guess what happens is that after a burst of wealth creation – as in the UK’s Industrial Revolution – part of the population that has made a lot of money wants to ease up, or wants to turn to the easier, and possibly more exciting, realm of politics.
I sometimes notice that some of the noisiest anti-libertarians, such as many academics in the universities, live in the US, the world’s richest nation, and I think the two things are in fact connected. If you have an incredibly wealthy country, it spawns a lot of folk who have the inherited wealth, the time, and the inclination, to make a living outside the immediate commercial system, and hence, will argue for something different. You can see this in certain family businesses: the Alpha Male type sets it up and makes a shedload of money; the son is sent to a posh school and starts to want to be part of the Establishment and is teased by his schoolfriends for being in “trade”. The next son may end up in the professions, and as such, will tend to be drawn towards the State, or at least take a more benign view of state power than granddad. And I think this is partly what happened in the UK in the second half of the 19th Century and into most of the 20th Century. Part of the “business class” that might be expected to form the backbone of a free market order got housetrained by a remarkably conservative, ruralist, anti-commerce establishment. (This book makes such a case, for example).
There is also the issue of “correlation is not causation”. Just because big government can sometimes be seen in wealthy societies in no way proves that the former helps bring about the latter, or vice versa. Stumbling and Mumbling implies that libertarianism, being what it thinks might be a simple-minded creed, cannot work in a sophisticated, wealthy society. In fact, I’d argue quite the reverse: the more complex a society is with a complex division of labour and profusion of individual tastes and demands, the less effectively big government tends to work. In fact, there are plenty of examples of rich societies with a relatively small government – perhaps Hong Kong being one of the best examples.
The CATO Institute’s annual index of freedom report also suggests a pretty close relationship between countries that are rich and where the government focuses on the core, minarchist roles of protecting life and property, enforcing contracts, preventing fraud, etc. That does rather undermine the point made in the comment I link to.
It is, of course, excellent news if it is true that parts of Africa are heading down the pro-market route. But using such examples to make a bit of a dig against the wider application of classical liberal ideas is unfounded.