Cato: No Federalism on the Right

This paper by David Boaz, Executive Vice President of the Cato Institute, asks an important question, one that societies have struggled with for hundreds of years. What is the proper role of government in our lives? Unfortunately, in answering the question he fails to make the important distinction between the role of government in our social lives and the role of government in our economic lives:

No Federalism on the Right, By David Boaz, May 15, 2005: … Federalism has always been a key element of American conservatism. … Lately… conservatives … have forgotten their longstanding commitment to reduce federal power and intrusiveness and return many governmental functions to the states. Instead, they have taken to using their newfound power to impose their own ideas on the whole country. … Some liberals are rediscovering the virtues of federalism. ... The prospect of a constitutional amendment banning gay marriage has made many liberals appreciate the virtues of having 50 states, each free to make its own marriage law. … Maybe it would even be OK for Los Angeles and Louisiana to have different environmental regulations. But most liberals can't give up their addiction to centralization. Even as they rail against federal intervention in the Schiavo case … they push for stricter regulations on pesticides and painkillers ... Only one modern political party has a history of taking federalism seriously, but Republicans have decided to abandon this principle to pander to small but vocal constituencies …

I’m not sure why he is upset with liberals for wanting stricter regulations on painkillers, but I’ll set that aside. Here’s what bothers me about the complaint that liberals are inconsitent for wanting the government out of the bedroom but involved in environmentaol regulation. There is a difference between social conservatism and economic conservatism. I want the government to stay out of my personal and social life. Period. But I do want the government to use economic principles to design policies to overcome market failures such as those brought about by pollution externalities. I do want monopoly power broken up. I do want information disclosure regulation in place when I buy a house. I want the government to help if I my private property is stolen. The idea that capitalism will produce competitive outcomes, or that trade will necessarily exist at all without government intervention is wrong. Evidence of that abounds when we look at the difficulty countries have had making the transition from centrally a planned economies to capitalist economies. One of the large lessons in that experience is the importance of government institutions in setting the conditions for capitalism and competition to flourish. It is a question of how much the government should intervene, not whether the government should intervene at all. The point is that there is an economic basis for intervening in some markets. Firms that produce pollution ought to pay the costs associated with it instead of being allowed to pass the costs on to society as a whole. There can be honest disagreement about whether there should be private sector solutions such as tradable pollution permits or control by government decree, but that is an argument about the form of the government intervention, not about whether intervention should exist. There is no such economic foundation for many social issues and it confounds the important question of the role of government in our social and economic lives when the two are mixed together. I want the government to intervene to overcome market failures inherent in capitalism. I guess that makes me a liberal. But I want the government to stay the out of my bedroom, out of my death, and out of the birth of my children. I want the government out of my social and personal life to the extent possible. These days, that makes me a liberal too.