When we use the words “limited government,” we usually have “conservative” ideas in mind that relate to making the government smaller [1]. However, the phrase taken literally doesn’t necessarily imply this. Instead, it relates to a system of government where there are limits on governmental power.

When we ask people whether they are in favor of the literal interpretation of “limited government,” almost all will undoubtedly say they are. After all, who in the world favors unlimited government?

My question for the political left, then, is “If you favor literally-limited government, what do you think the limits on the government’s power in economic affairs should be?” That is, what boundaries should the government never cross in controlling people’s lives in terms of coercively interfering in voluntary economic agreements?

Since the dimensions along which the government can interfere in economic life are varied, here are some sub-questions to get juices flowing (though they are by all means not all the questions to ask oneself). Answer these as if you could personally choose the restrictions on a “just’ government.

– Is there an income tax rate above which the government should never go – a tax rate above which the government could be considered tyrannical to the individual in question? How high is this tax rate?

– Should the government ever be able to confiscate the capital equipment of a company that is not harming anyone? (To make this easier, let’s suppose that the question is limited to times during which we are not at war with other countries.) What about wealth taxes on company or individual wealth? If yes to one question and no to the other, what is the philosophical difference between the two? If yes to either, how much is the maximum that should be able to be confiscated from a company or individual?

– Should the government be able to force companies to lower or increase their prices? By how much? Should the government have total power to set any price at any level it wishes? If not, then what are the limits?

– Should there be a limit on the percent of GDP government at all levels consumes? How much? What if “the public” demands more? Do we tell them “no”?

– Should there be limits on regulatory powers of government? If so, what should they be?

Last sub-questions: what if government were to overstep the boundaries you set out above? Would you condemn it as unjust? What if “the public” wants it to overstep the boundaries? Would you stand in the way of the majority getting what it wants (at least in principle if not in action)?

These questions are just examples of the type of things we should be asking ourselves to determine what the limits on government ought to be. While answering them, remember the initial question: How do we limit the government’s power in economic affairs? We know there must be boundaries – where do we draw them?

As a bonus, try not use the phrases like “whatever is necessary to achieve X,” since this is not really a very binding limitation but varies with the whim of the public or politicians. As such, things like “living wage” or “fair share” shouldn’t be part of your answer. Instead, try to focus on specific actions the government should not be allowed to perform.

I do not mean to pick only on the left – the right has plenty in which to find fault. I just find that the left and the right suffer from different sins. While the right tends to be inconsistent in their reasoning (sometimes terribly so), the left tends to be vague. In asking these questions, I am legitimately curious to know what limits members of the left think the government should have placed on it in the realm of trade.

Notes

[1] I put “conservative” in quotes because I’d argue that many conservatives do not espouse conservative ideas. This is one of the reasons I dislike the term conservative – it’s vague and historically inconsistent.