Saturday, February 04, 2006

Do free governments intervene too much?

Commentators in the US often present the USA as the land of free capitalist competition, even mistakenly attributing the wonders of US capitalism to Adam Smith, who never knew the word or the phenomenon – he died in 1790. This Blog spends its time correcting these errors of misattribution, but now comes a blow against the US image of being a free market in a disturbing piece, ‘The Leviathan (Ohio edition)’, on the Division of Labour Blog from Robert Lawson, one of its regular bloggers (read it at

It contains a list of the state boards and commissions for Ohio, known in Britain as Quango’s (Quasi-autonomous non-governmental organisations), to which Robert Lawson comments: ‘Boy I sure do sleep better at night knowing these fine people are out there “protecting” me.’

Accountancy Board of Ohio, Architects, State Board of Examiners of Athletic Commission Ohio, Auctioneers Program Barber Board, Ohio State Building Standards, Board of Chemical Dependency Professionals Board, Chiropractic Board, Ohio State Construction Industry Licensing Board, Ohio Cosmetology, Ohio State Board of Counselor, Social Worker, and Marriage and Family Therapist Board, Dental Board, Ohio State Dietetics, Ohio Board of Embalmers and Funeral Directors, Board of Emergency Medical Services, Board of Financial Institutions, Division of Hearing Aid Dealers and Fitters Licensing Board, Homeland Security, Division of Industrial Compliance, Division of Landscape Architect Examiners, State Board of Manufactured Homes Commission, Ohio Medical Board of Ohio, State Medical Transportation Board, Ohio Motor Vehicle Collision Repair Registration, Ohio Board of Motor Vehicle Dealer Licensing Board, Motor Vehicle Salvage Dealer Licensing Board, Nursing Home Administrators, Board of Examiners of Nursing, Ohio Board of Occupational Therapy, Physical Therapy, and Athletic Trainers Board, Optical Dispensers Board, Ohio Optometry, State Board of Orthotics, Prosthetics, and Pedorthics, State Board of Pharmacy, Ohio State Board of Professional Engineers and Surveyors, State Board of Registration for Psychology, State Board of Real Estate and Professional Licensing, Division of Respiratory Care Board, Ohio Sanitarian Registration, State Board of Securities, Division of Speech-Language Pathology and Audiology, State Board of Veterinary Medical Licensing Board, Ohio.

On reflection, is it really surprising that government inspired interventions are commonplace in so-called free markets? Modern government intervenes in all manner of places in every society – indeed, Adam Smith advocated in “Wealth of Nations” (Book V) a role for at least three quango’s: for the Hallmarking of gold and silver, the post-office, and the minting of coinage – but the scale of intervention today at every level of detail, apart from macro-interventions in the economy, still comes as something of a shock when they are listed as in the case of the Ohio.

Look in any phone book under Government, national or local; check the job adverts in newspapers, start working your way through all the regulatory bodies required just to build a modest extention on your home, or, in a preservation district or listed property, to make a modest changes in an internal or external feature.

We have come a long way from the simple free market and the perfect liberty to which Smith aspired. If the US is regarded as a free market, we can only conclude that there must be some pretty unfree markets around the world in comparison with it. I am sure there was a rationale for each and every state, commission and quango that was ever formed. But do we really need them?

Could the resources they consume be spent to better affect dealing with the real deprivation problems that require capital investment, which those enduring them can never afford? If we attend to these first, could we then reduce government expenditure and return the cash to the taxpayers, both direct and indirect?


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