Statism – government control of the economy and people’s lives – is on the rise and freedom in decline, as developments around the world show. In Canada, the federal government directs infrastructure projects, including oil and gas pipelines, foreign trade, housing development, and AI, among other things. It has also established a sovereign wealth fund that gives the state an increased stake in capital markets and as financier of government-favored projects. In the United States, the federal government is using tariffs and ownership stakes in companies to direct the economy. Similar observations can be made in the EU, Asia, and elsewhere.
Governments assume that through their votes, voters sign away their individual rights – their freedom – and let the government decide what is best of them. Elitist government leaders presume that they are naturally equipped to make better decisions than people trading in free markets and are therefore justified limiting their freedom, based on the leaders’ political philosophy of collectivism. Collectivism, according to Ayn Rand, “ … is based on a view of man as a congenital incompetent, a helpless mindless creature who must be fooled and ruled by a special elite with some unspecified claim to superior wisdom and a lust for power.”
Often, governments use some perceived threat as a justification for increasing their control. As Ayn Rand observed, “In order to justify it, the statists have to rouse people to a hysterical fear of some malevolent enemy who threatens them with constant, unpredictable dangers.” In the recent past, those malevolent enemies have been capitalists whose profit-seeking industrial activity has allegedly caused a “climate emergency,” the pandemic-causing corona virus leaked from a Chinese research lab, and now, President Trump and his unpredictable tariffs disrupting international trade.
Why do government leaders succumb to the hubris that they know what’s best for everyone? These are some plausible reasons:
- They are true believers in collectivism and have therefore adopted statism as their political ideology.
- They evade the importance of freedom to human flourishing and the government’s role in protecting it because that contradicts their philosophy of collectivism and statism.
- Like everyone else, they have a psychological need for self-esteem but instead of gaining it from their own productive efforts, they seek if from power over others that inflates their view of their own abilities.
On the other side of rising statism is its acceptance by those who repeatedly vote statist governments into power. Such voters share their political leaders’ ideology and want to be taken care of and looked after by the government. They want the state to ensure equal shares for all in the common pie that it has baked with their tax money.
To challenge statism and “the government knows best” thinking, we need to point out statism’s flaws and identify an alternative.
The problem with statism is that by attempting to direct and control the economy, the government diminishes human flourishing – which, ironically, it claims to protect by arguably meeting basic economic needs and ensuring equity for all. In Canada, despite the government’s efforts to direct the economy through industrial policies, the sovereign wealth fund, and taxation, growth is stagnant, capital is fleeing the country, productivity is sluggish, inflation is persistent, and almost a third of Canadians lives paycheck to paycheck. In the U.S., where greater freedom still exists, these problems have been largely avoided.
But human flourishing does not mean bare economic survival and equal struggle for all. The condition of flourishing is that people are able to depend on their basic tool of survival, reason. They must be free to think, engage in any productive activity, and trade with others of their choosing, to survive and enjoy life. Thinking, producing, and trading requires freedom to choose one’s work, to keep the proceedings from it and to prosper accordingly.
By limiting or abolishing that freedom – through confiscation of property and “redistributing” it to others, trough taxation, welfare programs, and foreign aid, or through restricting trade through regulations – a statist government undermines individuals’ freedom to pursue their values and thereby their flourishing.
The alternative to statism is a free society where the government plays a limited but crucial role and flourishing can be maximized.
Instead of controlling the economy and restricting individual choices, the government in such a society protects freedom by upholding individual rights to life, liberty, and property. Because those rights can only be violated by force, whether physical coercion or fraud, the government upholds them by deterring and punishing those who initiate force. This is the government’s only legitimate role and limits its functions to policing to protect citizens against common criminals, maintaining the military against foreign invaders, and operating the law courts to protect contracts and help resolve disputes.
In a free society, there is no role for the government in the economic and social realms. It doesn’t collect taxes and fund industrial or social policies, hand out subsidies, or bail out businesses. It leaves the citizens free to live, produce and trade, as long as they respect the freedom of others to do the same, which makes flourishing possible for all.
The gap between today’s statism and a free society is wide, but if we want to maximize human flourishing, we must strive to narrow it. One way to begin is to challenge those who hold the “the government knows best” premise by simply asking them “why?”.
Photo by William Zhao on Unsplash





