Opinion: Daily Journal

Don’t Just Stand There: Employ A Three-Question Test!

You wouldn’t call someone “anti-spoon” if he preferred to use a knife to cut his steak. It’s not “anti-clipper” to prefer a lawn mower for the task of cutting a large field of grass. And surely no one ought to be considered “anti-balloon” for preferring an airplane for a relatively quick cross-country flight.

That’s what makes the frequent misuse of the term “anti-government” so perplexing. It’s a common refrain among left-of-center commentators when they search for adjectives to describe those who advocate for free markets, individual freedom, personal responsibility, and limited government.

The notion of limiting government to its proper role does not equate to antipathy for government itself. The government we have should work as well as possible. That task would be easier if government agencies stuck to their proper tasks.

A recent reading of American Enterprise Institute president Arthur C. Brooks’ latest book brought this idea to the forefront. Titled The Road To Freedom, Brooks’ work states the moral case for free enterprise. Brooks discusses how the capitalist system helps satisfy a basic human need for “earned success.”

But beneath that overarching message, Brooks disabuses readers of the notion that he’s anti-government. Instead he offers a clear set of guidelines for determining when government action is appropriate. Those guidelines boil down to a simple chart featuring four questions. Only if each question leads to a “yes” answer should government consider intervening.

First, is there a source of “market failure,” in other words, a case in which free markets operating with no government interference fail to produce efficient outcomes? Second, is there evidence that the market actually fails? Just because the possibility of “market failure” exists, that doesn’t mean private actors have failed to work around that possible failure to produce good solutions.

Third, can the government reasonably solve the problem? If the government acts, that action ought to improve the situation, not make conditions worse. Fourth, do we have evidence that the benefits of government action outweigh the costs? In the economists’ and public policy analysts’ jargon, the government’s proposed policy should be able to survive a “cost-benefit analysis.”

A former college business professor and current think tank executive, Brooks has devoted much more time, study, and effort to issues such as “market failure” and “cost-benefit analysis” than this commentator. Nonetheless, Brooks’ list of questions aligns well with a simpler — and more jargon-free — list that’s guided this layman’s approach to the determination of the government’s proper course of action in the face of any perceived problem.

Rather than ask Brooks’ four questions, try these three: Is there a problem? Can government do anything about the problem? Should government do anything about the problem?

While simple to state, the questions are not necessarily simple to answer. Subjecting a single hot public policy issue to the three-question test highlights the way in which a thorough analysis can help block unnecessary government action at various stages of debate.

Since we’re looking for a “hot” public policy issue, how about climate change? The topic once went by the name global warming; then advocates for government action on warming realized they might have to account for the fact that the earth faced no significant warming for more than a decade.

But that observation steps on the first question: Is there a problem? Data showing rising global temperatures would not suffice to yield a “yes” answer. It’s important to know what type of impact rising temperatures have on the climate and on our lives. What are the negative effects? What are the positive effects? Do the former necessarily outweigh the latter?

It’s also important to know whether projections about potential negative impacts are based on actual measurements and observations, or whether those projections are based on models. If models are involved, how accurate have those models been in the past?

Despite the well-known “consensus” among climate scientists that the “science is settled” about the dangers of global warming, there seem to be a number of lingering questions about the extent to which warming constitutes a problem. It’s an issue that needs continued debate.

For the sake of the thought exercise, though, let’s say global warming is a problem. That leads us to the second key question: Can the government do anything about it?

Here the answer is yes. But that simple answer shouldn’t fool us into jumping immediately to the third and final question. It’s not enough to seek policies with the hope or intent of reducing global warming, or policies that seem as if they might have some impact on global warming.

A “yes” answer to question No. 2 involves a process of identifying the policies that government would need to adopt to solve — or at least mitigate — the problem. In the case of global warming, it quickly becomes clear that encouraging people to buy curlicue light bulbs, drive a hybrid Prius, and turn off the lights when they leave the room wouldn’t cut it. Neither would spending taxpayer dollars to prop up the “green energy” sector.

As global warming prophet Al Gore once explained, the policies necessary to fight global warming would lead to a “wrenching transformation” in our lives. Government would need to force us to scale back energy use to levels last seen in horse-and-buggy days. And not just our government. Every government on earth would need to cooperate in cutting back on the juice.

This scenario highlights the importance of question No. 3. If we concede — only for the sake of this exercise — that climate change causes a problem, and that government can do something about the problem, we still need to decide whether government should do something about it. It’s a question that goes beyond the gut reaction to tell government agencies: “Don’t just stand there — do something!”

This is where Brooks’ notion of the cost-benefit analysis comes into play. Government policies generate costs — direct costs, as well as indirect costs linked to lost economic activity and the diversion of scarce resources from other uses. It’s important to gauge whether the benefits of those policies outweigh the costs.

It should be clear that this commentator holds serious doubts that the benefits associated with climate policies ever could outweigh the costs of “wrenching” societal transformation. But the larger point is that public policy debates must revolve around these types of questions, not vague notions that government must act in response to any vaguely defined problem that enters the public consciousness.

In Brooks’ words, too many people eschew basic questions about government’s fundamental role and instead rely on a “modern adlibocracy,” where “what passes for governing philosophy is little more than a bromide such as, ‘The government should do nice things for people.’”

The government would be a whole lot nicer if it just stuck to doing its proper job.

Mitch Kokai is director of communications for the John Locke Foundation.