The late Henry Hazlitt, noted economist, author, editor, reviewer and columnist, was well known to readers of the New York Times, Newsweek, The Freeman, Barron’s, Human Events and many others. Among his numerous books are The Inflation Crisis and How to Resolve It and Economics in One Lesson.
I remarked in “The Case for the Minimal State” (The Freeman, November 1979) that we might get some help in dealing with the central problems of government power by examining the answers offered over the years by the great political thinkers. But I suggested it might be more interesting to do this rather in the reverse of their chronological order, and begin with the latest answers first. We accordingly began with the recent book by Robert Nozick, Anarchy, State, and Utopia. I should like now to turn to some of the answers offered in the nineteenth century. To try to present the whole of nineteenth century thought on this subject would in itself require at least a full-length book and probably a repetitious one. So I shall confine myself to the answers offered by three or four outstanding writers who seem to me to offer representative approaches—John Stuart Mill, Herbert Spencer, Thomas Huxley, and Auberon Herbert. Mill’s main discussion of the problem occurs in Volume II (Book V, Chapters I and IX) of his Principles of Political Economy, first published in 1848. When one recalls that Mill was brought up in the laissez-faire tradition, some of his conclusions may seem surprising. He begins by distinguishing between the “necessary” and the “optional” functions of government. The first are those which “are either inseparable from the idea of government, or are exercised habitually and without objection by all governments.” The second are those functions of which the “expediency of its exercising them does not amount to necessity” and “on which diversity of opinion does or may exist.” Mill’s Extended List of Necessary Functions of Government The necessary functions of government, he insists, are “considerably more multifarious than most people are at first aware of.” The contention, for example, that “governments ought to confine themselves to affording protection against force and fraud,” and “that, these two things apart, people should be free agents,” is much too narrow. What about, for example, the laws of inheritance? Not only is the government obliged to decide what happens to an estate when there is no will; it must pass on the validity of a will; it must decide among litigants. Again, the government must enforce contracts. It must decide what contracts are fit to be enforced. (A contract to do something contrary to law? A contract to sell oneself into slavery?) The state must also establish civil tribunals to settle disputes. It must keep a registry of facts, such as births, deaths, marriages, wills and contracts, and judicial proceedings. It must decide on the legal competency of children, or alleged lunatics, and provide for guardians. It may undertake the function of coining money, and of prescribing a set of standard weights and measures. It may make or improve harbors, build light houses, make surveys for accurate maps and charts, raise dykes to keep the sea out, or embankments to keep rivers in. National governments may build roads, and municipal governments may pave, light, and clean the streets. “Examples might be indefinitely multiplied without intruding on any disputed ground.” In a later chapter, Mill considers some of the reasons for limiting government power. “There is a part of the life of every person who has come to years of discretion, within which the individuality of that person ought to reign uncontrolled either by any other individual or by the public collectively . . . . A second general objection to government agency is that every increase of the functions devolving on the government is an increase in its power”-which may soon become “arbitrary.” . . . “A third general objection to governmental agency rests on the principle of the division of labor. Every additional function undertaken by the government is a fresh occupation imposed upon a body al ready overcharged with duties. A natural consequence is that most things are ill done; much not done at all.” There follows a long description of the reasons why, in general, private enterprise and initiative are more efficient than government in carrying on any enterprise. In every in stance these reasons are more than sufficient, Mill concludes, to throw “the burden of making out a strong case, not on those who resist, but on those who recommend, government interference. Laisser-faire, in short, should be the general practice: every departure from it, unless required by some great good, is a certain evil.” He supplements this with a recital of the incredible restraints on business imposed historically in seventeenth-century
But then Mill turns to what he regards as the “exceptions” to the generally beneficent rule of laissez-faire. “The proposition that the consumer is a competent judge of the commodity, can be admitted only with numerous abatements and exceptions . . . . The uncultivated cannot be competent judges of cultivation. Those who need most to be made wiser and better, usually desire it least, and if they desired it, would be incapable of finding the way to it by their own lights . . . . Education, therefore, is one of those things which it is admissible in principle that a government should provide for the people . . . .
“With regard to elementary education, the exception to ordinary rules may, I conceive, justifiably be carried still further . . . . It is therefore an allowable exercise of the powers of government, to impose on parents the legal obligation of giving elementary instruction to children. This, however, cannot fairly be done, without taking measures to insure that such instruction shall be always accessible to them, either gratuitously or at a trifling expense.” The one safeguard Mill insists on is that “the government must claim no monopoly for its education.”
More Exceptions
Mill continues with his “exceptions” to the principle of laissez-faire. “Insane persons are everywhere regarded as proper objects of the care of the state.” “It is right that children and young persons . . . should be protected, as far as the eye and hand of the state can reach, from being over-worked.” “Cruelty to animals” should be forbidden. “The law should be extremely jealous” of all “engagements for life”—including marriage. If it grants a monopoly for a private road, canal, or railway, the state “should retain, and freely exercise, the right of fixing a maximum of fares and charges.”
The state should have the right to diminish the hours of adult labor.
Mill approves the Poor Laws, and endorses the principles of the Poor Law of 1834. “The claim to help, created by destitution, is one of the strongest that can exist.” But the problem is “how to give the greatest amount of needful help, with the smallest encouragement to undue reliance on it.” For “if the condition of a person receiving relief is made as eligible as that of the laborer who supports himself by his own exertions, the system strikes at the root of all individual industry and self-government.” Yet we cannot depend on “voluntary charity.” “In the first place, charity almost: always does too much or too little: it lavishes its bounty in one place, and leaves people to starve in another. Secondly, since the state must necessarily provide subsistence for the criminal poor while undergoing punishment, not to do the same for the poor who have not offended is to give a premium on crime.”
Mill goes on to recommend government subsidies for colonization, for “scientific researches,” and for other modes “of insuring to the public the services of scientific discoverers.”
And as a final argument for extending government power still further, he adds: “The intervention of government cannot always practically stop short at the limit which defines the cases intrinsically suitable for it. In the particular circumstances of a given age or nation, there is scarcely anything really important to the general interest, which it may not be desirable, or even necessary, that the government should take upon itself, not because private individuals cannot effectually perform it, but because they will not.”
An Open-Ended Formula
This last argument is capable of serving as an excuse for almost any arbitrary government intervention whatever. Mill ends by granting most of the contentions of the present-day statists. As he keeps adding to his list of “exceptions” to the general rule of laissez-faire, he gradually seems to forget all his earlier warnings against piling an unmanageable number of functions on the state and building excessive powers that can more easily be abused. In many of his exceptions he unconsciously takes it for granted that the state will necessarily do better than private initiative. He overlooks the possibility that scientists may be subsidized on the basis of favoritism or that the subsidized projects will be selected on the basis of political rather than scientific appeal.
After having warned us that the state may carry out its delegated powers very badly, he assumes in particular instances that they will carry out these powers very well. He rightly approved the restrictive principles of the Poor Law of 1834, which required from the applicant for relief, as Nassau Senior put it, “monotonous and uninteresting” toil in a workhouse, so that he would retain an incentive to become again as soon as possible an independent laborer. What Mill did not foresee was the immense political difficulty of retaining such a disciplinary system once relief was embarked upon. He did not foresee that this disciplinary system would soon come to be regarded by a large part of the public as needlessly harsh and even heartless. The sentimental but powerful pen of Charles Dickens, for example, was shortly to make the retention of the workhouse system impossible. The almost inevitable tendency in any relief system is for demagogic politicians to remove one by one all the original restraints and safeguards and to load the relief rolls to the point where work incentives are destroyed, the national budget becomes chronically unbalanced, and a progressive inflation sets in.
Even more broadly, what Mill overlooked was that once these broad powers of control were put in the hands of the state, under a popularly-elected government, that government would be very unlikely to adhere to the sound economic (and anti-interventionist) principles that Mill, and other economists of his school, were recommending in their textbooks, but would enact popular prejudices leading to inflation, to price-controls, to “soak-the rich” taxes, to the redistribution of wealth and income, to anti-capitalistic and anti-productive policies of every other kind, and incidentally to the eventual destruction of liberty.
In his essays on
Henry Hazlitt
Henry Hazlitt (1894-1993) was the great economic journalist of the 20th century. He is the author of Economics in One Lesson among 20 other books. See his complete bibliography. He was chief editorial writer for the New York Times, and wrote weekly for Newsweek. He served in an editorial capacity at The Freeman and was a board member of the Foundation for Economic Education.