MATT RIDLEY is a science writer and the founding chairman of the International Centre for Life. He is the author, most recently, of Francis Crick: Discoverer of the Genetic Code.
In all times and in all places there has been too much government. We now know what prosperity is: It is the gradual extension of the division of labor through the free exchange of goods and ideas, and the consequent introduction of efficiencies by the invention of new technologies. This is the process that has given us health, wealth, and wisdom on a scale unimagined by our ancestors. It not only raises material standards of living but it also fuels social integration, fairness, and charity. It has never failed yet. No society has grown poorer or more unequal through trade, exchange, and invention. Think of pre-Ming as opposed to Ming China, seventeenth-century Holland as opposed to imperial Spain, eighteenth-century England as opposed to Louis XIV’s France, twentieth-century America as opposed to Stalin’s Russia, and postwar Japan, Hong Kong, and Korea as opposed to Ghana, Cuba, and Argentina. Think of the Phoenicians as opposed to the Egyptians, Athens as opposed to Sparta, the Hanseatic League as opposed to the Roman Empire. In every case, weak or decentralized government but strong free trade led to surges in prosperity for all, whereas strong central government led to parasitic, tax-fed officialdom, a stifling of innovation, relative economic decline, and usually war.
Take Rome. It prospered because it was a free-trade zone. But it repeatedly invested the proceeds of that prosperity in too much government and so wasted it in luxury, war, gladiators, and public monuments. The Roman Empire’s list of innovations is derisory, even compared with that of the Dark Ages that followed.
In every age and at every time, there have been people who say we need more regulation, more government. Sometimes they say we need it to protect exchange from corruption, to set the standards and police the rules—in which case they have a point, though often they exaggerate it. Self-policing standards and rules were developed by free-trading merchants in medieval Europe long before those standards and rules were taken over and codified as laws (and often corrupted) by monarchs and governments.
Sometimes they say we need it to protect the weak, or the victims of technological change, or trade flows. But throughout history such intervention, though well meant, has usually failed those it intended to help, because its progenitors refuse to believe in (or find out about) David Ricardo’s Law of Comparative Advantage: Even if China is better at making everything than France is, there will still be a million things it pays China to buy from France rather than make itself. Why? Because rather than invent, say, luxury goods or insurance services, China will find that it pays to make more T-shirts and use the proceeds to import luxury goods and insurance.
Government is a very dangerous toy. It is used to fight wars, impose ideologies, and enrich rulers. True, nowadays our leaders do not usually enrich themselves (at least not on the scale of the Sun King), but they enrich their clients: They preside over vast and insatiable parasitic bureaucracies that grow by Parkinson’s law and live off true creators of wealth, such as traders and inventors.
Sure, it is possible to have too little government. Except that has not been the world’s problem for millennia. After the century of Mao, Hitler, and Stalin, can anybody really say that the risk of too little government is greater than the risk of too much? Or that it is Africa’s problem today? The dangerous idea we all need to learn is that the more we limit the growth of government, the better off we will all be.