Herbert Spencer on the superiority of private enterprise over State activity (1853)

Herbert Spencer

The English individualist political theorist Herbert Spencer (1820-1903) wonders why, given the never ending stream of news about government incompetence and failure, people still call for it do do more:

(T)hey seem to have read backwards the parable of the talents. Not to the agent of proved efficiency do they consign further duties, but to the negligent and blundering agent. Private enterprise has done much, and done it well. Private enterprise has cleared, drained, and fertilized the country, and built the towns; has excavated mines, laid out roads, dug canals, and embanked railways; has invented, and brought to perfection ploughs, looms, steam-engines, printing-presses, and machines innumerable; has built our ships, our vast manufactories, our docks; has established banks, insurance societies, and the newspaper press; has covered the sea with lines of steam-vessels, and the land with electric telegraphs. Private enterprise has brought agriculture, manufactures, and commerce to their present height, and is now developing them with increasing rapidity. Therefore, do not trust private enterprise. On the other hand, the State so fulfils its judicial function as to ruin many, delude others, and frighten away those who most need succor; its national defences are so extravagantly and yet inefficiently administered as to call forth almost daily complaint, expostulation, or ridicule; and as the nation’s steward, it obtains from some of our vast public estates a minus revenue. Therefore, trust the State. Slight the good and faithful servant, and promote the unprofitable one from one talent to ten.

In this essay Spencer asks one of the perennial questions about the efficiency of state run enterprises. Why do people call for the extension of state run activities in the face of so many examples of, on the one hand, the efficiency, innovations, and falling costs of private enterprise, and ever increasing numbers of examples on the other hand (this was in 1853!), of state inefficiency, carelessness, incompetence, and even criminality? He cites in a sad but also amusing way the failures of the government in providing justice, provisioning the Army, and building ships for the Navy. In contrast he cites a long list of things private enterprise has provided well - “Private enterprise has cleared, drained, and fertilized the country, and built the towns; has excavated mines, laid out roads, dug canals, and embanked railways; has invented, and brought to perfection ploughs, looms, steam-engines, printing-presses, and machines innumerable” - a list of infrastructure and other goods which modern day critics claim “only the government” could build and run efficiently. Spencer’s answer is a gloomy one. It is partly due to the blunt denial of the facts, that government enterprises fail because they were not implemented correctly, or that the “wrong people” were in charge, rather than because of some deeper, systemic problem with any state-run activity based on coercion. It is also partly due, he thinks, to the lingering belief in “the great political superstition” which so many people have, namely that their leaders are “omnipotent” and can do no wrong, and that all they have to do is pass the right law to fix any problems which may arise. Spencer calls the people who believe in this political superstition “law-worshippers” and thinks that “this faith in governments” is something that only time will eradicate.