How Much Control Should The Government Have?: Bible Money Matters

How Much Control Should The Government Have?

Posted: 22 Mar 2011 04:52 AM PDT

Who is to say how a government is run? Isn't it an establishment 'of the people, by the people, and for the people' designed to enhance our freedom to choose how we want to live? So then the answer is this: people.

The most interesting part is that it's both the answer and problem behind the question of government control.

So what? I mean this isn't anything new, right? In fact, I'd argue that these principles were established well before the United States formed as a nation. But that's the beauty of it all – nothing's new under the sun.

The point of this article isn't to bring up any new ideas to the role of government but to revisit the foundational roles that were established by the father of economics, Adam Smith.

Adam Smith's Three Roles Of Government

In his book, The Wealth of Nations, Smith outlines the role of government in cover three distinct areas: military force, administration of justice (law), and provision of public goods.

Role 1: Military Force

The first priority of the government should be to protect its citizens from outside forces that try to compromise our freedoms. The ultimate reason for this provision is to ensure that the nation is sustained for as long as possible.

Smith presents a not-so-groundbreaking thought that if government spending is reckless during peacetime, that war will require the nation to borrow. Unfortunately, this is a reality today. The principles of budgeting still apply for the everyday person and for the most powerful of governments.

Role 2: Administration Of Justice

"Commerce and manufactures can seldom flourish long in any state which does not enjoy a regular administration of justice, in which the people do not feel themselves secure in the possession of their property…"

If there were no laws protecting society members in areas of property rights, legal contracts, or other rules of law, we'd probably live in a constant state of fear that someone would wrong us. Smith explains that the government should have a role in creating laws that keep the peace. Exactly how far these laws should reach, well that’s the big question. His point is that we should have a common source for justice and the government makes the most sense as a source for legal resolution.

Role 3: Provision Of Public Goods

The third and most debated role of government involves spending for the public good. This includes building roads, bridges, canals, parks, or any other public feature that no one person wants to fund. Even more interesting is Smith's suggestion that these features should be self-financing. That means if you don't use the road, you don't pay. Enforcing tolls or other fees to construct these public goods is his recommendation.

Another recommendation of Smith is that governments should subsidize the general education of its people in order to create a healthier society. He stated that "an instructed and intelligent people…are always more decent and orderly than an ignorant and stupid one," suggesting that it's easier to govern those who are educated. The scope of this funding, Smith argues, shouldn't be extensive, but just enough to provide the basic needs to "read, write, and account."

Government's Roles In Society Today

The role of government in society today has reached far beyond the three basic roles that Smith proposed in the late 1700's. Unfortunately, a major cause of the expansion of government's role has been founded on people's natural tendency to feel entitled to get something in return for very little or nothing in some cases.

I know we'll never completely rewind and reduce government to these three roles, but it is interesting to see how a government (elected by the people and made up of people) can expand beyond the basic roles outlined by Adam Smith.

What do you think of the three roles outlined by Adam Smith? Agree or Disagree? Would a simplistic government, as outline by Adam Smith, work in today's society?

This article was written by Tim Fraticelli. Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook.