5 Things the Government Does Well


Some people choose to be Republicans, some people choose to be Democrats, just please do me a favor, don’t be a libertarian. Often times, you’ll hear libertarians assert that government is incompetent and ineffectual. They’ll say that government is the problem, not the solution. Their whole ideology is based on the false claim that government is inherently bad. I do sympathize with the modern libertarian in some ways. I readily admit our government isn’t perfect. What I want to do is bring up some instances of our government doing some positive things in order to frame the debate in a clearer way for people. Government is not inherently good or evil. We must analyze each aspect of government individually on its merits alone.


1. Food and Drug Administration

In 1906 our government passed the Pure Food and Drug Act, and thus, the Food and Drug Administration as we know it was born. The FDA is an arm of the government that enforces food and drug regulations. In the early 1900s, high level journalism, coupled with scientific research, exposed how unfettered capitalism does not efficiently distribute resources. In order for markets to function properly, people need to be acting rationally and in their own self interests. Businesses used to sell sugar pills as the cure for cancer. They made chemicals that they could put on rotten meat to hide its rottenness. Businesses did all kinds of disgusting things to their food products behind closed doors to keep them fresh and sellable. Food and drug products were often mislabeled, and did not provide honest information about what was in it. If people don’t know what they’re buying, then how can they estimate the price they are willing to pay for it?  The FDA helps us to make more informed decisions by forcing companies to accurately label their products. No politician today would ever dare suggest getting rid of the FDA. Businesses now have to focus on offering us a better product to increase profits, rather than dressing up rotten or spoiled products. Sugar pills no longer pass as medication. Drugs must go through a strict process to insure they work as intended. Contrary to popular libertarian belief, this is an example of how government can make markets more efficient.


2. The Federal Reserve

The Federal Reserve is another great example of how government makes our lives better. Before the Federal Reserve, our economy had experienced a myriad of banking panics also known as bank runs. In 1907 the United States had experienced one of the worst banking panics of all time which led congress to pass the Federal Reserve Act in 1913. Bank runs start when a too many people withdraw their money at one time from a single bank. The bank doesn’t have enough cash on hand to cover all of the withdraws. Once word gets out that one bank doesn’t have enough cash on hand to cover the withdraws everybody everywhere goes to their bank to demand a withdraw. People are scared that if they don’t get to the bank fast enough that the bank won’t have their money. This creates a situation where even responsible banks become insolvent. Congress created the Federal Reserve to be a lender of last resort to banks that need cash to cover their deposits. Over the years the role of the Federal Reserve has expanded. The Fed has a dual mandate set by congress to maximize employment while also controlling inflation through the use of monetary policy. Since the creation of the Federal Reserve the United States has had a much more stable banking system. Some of the biggest proponents of the Federal Reserve are the banks themselves. The Fed lowers the overall systematic risk to our economy, so that everybody is better off.


3. Securities and Exchange Commission

In 1934 congress passed the Securities Exchange act, otherwise known as The Truth in Securities Act. The government created the Securities and Exchange Commission to enforce it. The SEC’s job is to protect investors, and maintain orderly and effective securities markets. They create a standard that public companies have to abide by when reporting their earnings. The SEC makes sure companies are honest when reporting their income, assets, liabilities, and other useful financial metrics. Their goal is to provide stability to capital markets. After the stock market crashed during the Great Depression, our nation realized how important it was to have honest book keeping for publicly traded companies. It would be tough to make an argument that a private company could make standards for all publicly traded companies in regards to book keeping, but I’m sure some libertarian somewhere will try to make that argument.


4. NASA

The National Aeronautics and Space Administration otherwise known as NASA was established in 1958. We all know they put a man on the moon, while paving the way for satellite and GPS technology. Some people don’t realize all the other things we have because of NASA. NASA invented the main ingredient in most modern baby formula. They were the first to use a mouse for their computers. They contribute to all sorts of other aspects of science including water filtration and survival techniques. They gather all sorts of information about nature and further our understanding of science, math, and the universe. NASA doesn’t make a profit. If a capitalist did want to create a space administration, then who would pay them? If the government were to pay them, then why wouldn’t we just do it ourselves? Any rational person can see the only way NASA can exist is because of government. Libertarians want us to live in a cold NASA-less world, and that’s a world I certainly don’t want to be apart of.


5. Centers for Disease Control and Prevention

Don’t even get me started on the Centers for Disease Control and Prevention otherwise known as the CDC. Their job is to protect the public from disease. They do this by conducting research, as well as controlling the spread of disease. The CDC was started in 1946 as a way to control Malaria. The Private Sector doesn’t have an incentive to prevent and control diseases. Who would pay them to do that? The government would be better off having a CDC than to pay a private company to do it. If a private company did have a capacity to prevent and control disease, they would charge us for the costs and the profit. We would not only be paying for all the costs involved, but we would also have to pay that little extra for the profit margin. In this case it makes sense for the government to pay for the costs only, considering the government doesn’t have a profit motive. I’m sure Libertarians like the Koch Brothers would want the CDC to be run as a private company, because it would provide them yet another opportunity to wring the American tax payer dry.

There are many instances where the government interferes in markets. They force electric companies and internet companies to build cables to people in rural areas. It doesn’t make sense to build hundreds of miles of power lines to a small town in the middle of Wyoming, but they have to because the government makes them. The point is, the government can be good and it can be bad, we must judge each government program on its merits. Libertarians just apply blanket statements about government that doesn’t apply everywhere. We must combat this poisonous ideology with solid examples of the government doing positive things. The small list of examples I gave doesn’t fully encompass all the great things government can do for us. The answer for things is never as simple as; just eliminate government programs and regulations, and everything will be okay. A monkey could just eliminate government, the problem is real decisions are much more complex than that, and require a higher level of thinking.

Chris Weber

current events economics

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