Governments are expensive, inefficient, and distort markets
This is the second part of a four-part essay introducing Libertarian philosophy. The case for Libertarianism is twofold: moral consistency (socially liberal) and economic prosperity (fiscally conservative).
Part 1 laid out the moral case, showing how self-ownership is our most fundamental right. If we accept this principle, then government—by its very nature—violates self-ownership through taxation and coercion.
Part 2 now turns to the economic case for Libertarianism, demonstrating why free markets lead to better outcomes than government intervention. Governments promise solutions to poverty, healthcare, and education, but they fail to deliver. The free market, driven by competition and voluntary exchange, is always the better alternative.
Government spending is often seen as a way to “help” society, but nothing is truly free. Every dollar spent must first be taken through taxation or borrowed, creating debt that future generations must repay. Unlike private businesses, governments face no competitive pressure, leading to waste, inefficiency, and misallocation of resources.
When people say “The government should provide healthcare, education, and housing for free”, they ignore the fundamental economic reality: these things still require labor and resources. The cost does not disappear—it is merely transferred to taxpayers.
Unlike government programs, free markets allocate resources based on supply and demand. When businesses compete, they are forced to innovate, reduce costs, and improve quality to attract customers.
History provides overwhelming evidence that capitalism reduces poverty and increases prosperity. Countries that embrace economic freedom—such as Hong Kong, Singapore, and Switzerland—consistently outperform those with heavy government intervention.
Regulations are often justified as protections for consumers and workers, but in reality, they increase costs, limit competition, and stifle innovation. Large corporations lobby for regulations that benefit them by making it harder for new competitors to enter the market.
Consider: - Healthcare – Licensing requirements and regulations drive up costs, preventing competition from lowering prices. - Education – Public school monopolies and government loans inflate tuition costs. - Housing – Zoning laws and building regulations limit supply, making housing less affordable.
The irony is that government intervention often creates the very problems it claims to solve. For example, high healthcare costs are blamed on the free market, yet the healthcare industry is one of the most regulated sectors in the economy.
Government programs sound appealing in theory, but they fail in practice because they ignore basic economic principles. The free market is the only system that consistently delivers prosperity, innovation, and individual freedom.
If we agree that taxation is immoral (as discussed in Part 1), and we now see that government is economically inefficient, then the logical conclusion is clear: government should play no role in the economy.
In Part 3, we’ll examine U.S. history through a free-market lens, showing how government intervention—including the Federal Reserve—has caused economic inequality and decline.
Disclosure: The content herein is my own opinion and
should not be considered financial advice or recommendations.