This essay is a follow-up to a previous piece I wrote on the topic of Objectivism.
The role of government should be as small as possible–otherwise the friction of the necessary bureaucracy would just be a waste. But how small is that? Some hold that the only true function of government is to protect its citizens from the use of force through the military and the police; hard-line Objectivists sometimes advocate for the complete or near-complete elimination of government except for these duties. Yet I think this attitude is too narrow: military and police are one necessary function of government, certainly, but might there be others? To understand what government’s role should be, we must first understand why large-scale organizations and bureaucracies, including governments, exist at all.
The purpose of an organization of any scale is for multiple individuals to pool their efforts and resources to accomplish some task or meet some goal. Organizations are a powerful tool because not only do they allow each member of the group to benefit from the skills and expertise of others, they also allow all members of the group to share the risks of failure. In this way, organizations are simply a special case of trade, where what’s traded are the group members’ skills, time, and energy. In exchange, the members of the group agree to share the rewards of their endeavors, meaning that it’s more difficult to measure individual contributions. Essentially, by joining a group instead of trying to accomplish something on your own, you gain additional resources towards the attainment of a common goal, at the cost of having less autonomy and having to “average out” your reward over each member of the group. Consequently, organizations make the most sense when the advantages of pooling resources outweigh the disadvantages of loss of autonomy. When this occurs, it’s almost always due to an economy of scale: that is, the resources required to gain the desired reward are above some threshold of investment that is infeasible or impossible for an individual to support, or the total resources required for a large-scale investment are much smaller than the total resources that would be required for many small-scale investments.
Obviously, in addition to making economic sense, each member of the organization must share some common goal. Although the most effective organizations tend to have very strong internal cultures with rather specific common goals, in general the larger the organization the more universal its goals need to be. It follows, then, that because governments are the largest possible organizations (participation is mandatory), the natural function of governments is the attainment of goals for which every possible participant has an interest, and for which economies of scale apply.
Militaries, police, and laws are all excellent examples of such goals. Protection from violence and compensation for broken contracts of trade (including implicit contracts such as ownership, privacy, and honesty in advertising) are interests shared equally by all human beings, and they are unattainable without the participation of everybody–laws have no utility unless they are universal. What other goals might an entire nation share in common?
One common goal for which economies of scale often apply is transportation. It is in everyone’s best interest to be able to reach any part of the country from any other part. It is also in everyone’s best interest for the methods of transportation to be compatible between different regions–a road in Arkansas should not be significantly different from a road in New York, nor should a different kind of car be required in order to drive on them. The same goes for public transportation such as subways and railroads within large cities, and it’s even more true for sea and air transport: everyone benefits in this case from some kind of centralized coordination (ground control) and universal standards (flight regulations).
An even stronger example is education. Everyone in society benefits equally from a well-educated populace. Allowing only wealthy children to attend school would do nothing but help to perpetuate the kind of corrupt, self-sustaining wealth associated with the Occupy movement’s “1%”. The consequence of an unevenly-educated population is individuals being rewarded disproportionately for their skills and effort, which results in less overall value for society, which is harmful for everyone. Therefore, public education (or at least, publicly-funded education) makes sense as a governmental responsibility.
The cases for other responsibilities such as universal health care, environmental and business regulations, and unemployment protections are more complex and are beyond the scope of this essay. Indeed, my point here is that governmental responsibilities are not and should not be clear-cut–their necessity depends on economic utility on a large scale, and macroeconomics is notoriously complicated. Even deciding what’s in everyone’s common interest can be a deceptively difficult task–as the furor over public education reform attests. To assert that a government’s sole function should be the military is absurd–not least of all because there is no apparent reason why militaries should be the only exception to privatization if other roles such as education, environmental regulation, and international trade are not. One may as well argue that railroad companies should be limited to transporting vegetables and nothing else. Because taxes, like the laws they support, are mandatory and universal, governments are obligated to spend those taxes on projects of universal interest, where they expect to be able to do a better job than smaller organizations could. There is no reason to believe that the military is the only possible expenditure that fulfills those requirements.
 That’s why large corporations tend to focus primarily on making money, with other goals playing a secondary or supportive role: money is simply a generalization of all wealth and value, so it’s the most general type of goal. That said, the more specific the organization can make its goals, the more successful it’s likely to be, since all else being equal people prefer to work towards multiple goals other than just monetary gain.