What is the appropriate role of government in society? That’s the classical liberal question. And then what is the machinery of freedom that brings it about? We’re going to make an argument for poly-centrism or notions of fiscal federalism. Competition within government structures.
That was Pete Boettke discussing his new book, “Public Governance and the Classical Liberal Perspective.”
Defense tends to be one area that libertarian minded people tend to avoid thinking about. It is perhaps the best example of a public good, and thus comes under the central administration of government. I’ve heard from some that defense can be fully privatized with increases in technology — for example, missile defense can “calculate” that if you haven’t paid, then it won’t stop an enemy missile from striking your house. But I don’t think that is a reasonable way of thinking about the problem.
Instead, competition within government structures — a focus on poly-centrism — brings in some of the elements of a liberal market society into the functioning of government. This was perhaps the normal state of governance before Robert McNamara took the helm in 1961. However, poly-centrism looks inefficient from a static-model view of the world. The “rationalists” decided that a single master plan would take advantages of unlimited economies of scale, and that desired outputs could be achieved with little input from the people doing the work. And so we allocate funding based on outputs, rather than fund organizations who could devise their own plans, leaving the top levels to focus on governance structures of communication and exchange.
Budgeting is perhaps the most important governance structure because it determines who gets how much money. Should the budget be classified by program output or by organizational/mission input? Here is a reflection from Eileen Norcross from the Mercatus Center:
There is a lesson from this book I think is crucial. We as analysts must move from proposing ideal end states and ideologically informed outcomes to understanding the processes in which institutions emerge under voluntary and contractual governance arrangements. As experts or researchers, are we imposing our dearly held beliefs and priors to drive towards an end state rather than viewing these phenomena as complex systems, not simplified static models?
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