For more than three centuries, defenders of people’s freedom and dignity against the oppression of governments have frequently focused on economic depredations. In the 17th century, John Locke decried unjust limits on private property. In the 20th century, Friedrich Hayek attacked the state’s control of the means of production. The Austrian philosopher, who is a kind of patron saint for today’s crusaders against big government, was certain that men could not be free without free markets. He saw socialist economics behind all big governments, which he believed to be universally oppressive.
It is not only the enemies of powerful governments who have considered economic matters to be pre-eminent. The followers of Karl Marx disagreed totally with Hayek about government and freedom. They thought free markets led only to the oppression of the poor by the rich and that large states were needed to defend true freedom. However, like Hayek, they put the economy at the centre of the debate about the proper role of government. They merely reversed his primary prescription, with pure Marxists calling for total government control of the economy and revisionists calling for a strong state and a carefully limited private sector.
The revisionist Marxists are now known in Europe as Social Democrats and in the United States as Democrats (although few would admit this intellectual ancestry). They have had their way with the economy throughout the developed world – and the economies have basically flourished. Extensive, active and basically honest governments are good economic stewards. Big governments support and supervise the massive investment projects, complex technological standards and the astounding diversity of tasks required for industrial economies to thrive. Thorough tax systems restrain the rich while welfare benefits protect the poor.
Still, economic success is not enough to justify the ambitious and intrusive contemporary approach to government. The Big State should be judged by a more complex standard than simple material prosperity.
Hayek feared the terrible regimes of the Stalinist Soviet Union and Nazi Germany. Modern governments are nothing like those Big Oppressive States. Still, they can fairly be called Big Smothering States. There are three ways in which the government makes society less free, and in all of them the economy is the exception.