Like many, I embrace the liberal motto “live and let live”. Individuals should be free to think, say and do as they please provided it doesn’t infringe on the liberty of others to do likewise. But living up to this motto does not necessarily call for small or minimal government, especially in the economic sphere. Until individuals are, of their own volition, ready to make use of real resources in a cooperative and harmonious fashion, promotion of liberty requires government.
Rivalry over real resources is resolved to some extent through the defining and enforcement of property rights – whether private or public – a process that ideally is carried out by an authority acting on behalf of society as a whole. Existing property rights form part of the framework within which individual and group economic activity can take place more or less peacefully. To the extent a system of property rights creates a context conducive to free creation and expression, it can be liberty enhancing.
Even so, historically the establishment of property rights has disproportionately enhanced liberty for the propertied at the expense of the propertyless. Without some form of compensation, it is difficult to see why the propertyless should meekly accept the situation rather than attempt to change it. History suggests that when pressed for long enough, they eventually do challenge the situation. Perhaps for this reason, a degree of compensation, even if insufficient, generally is forthcoming through the formation of common wealth (public institutions, public services, public infrastructure, public property, etc.), government regulation (such as consumer protections and industrial relations legislation) and an array of tax-transfer measures.
In the present economic system, the “live and let live” principle is breached in other ways too unless government both exists and acts appropriately. From macroeconomics we know that the free choice of some individuals to save can have an unintended effect of limiting the economic choices and opportunities available to others. A desire of some to spend less than their income will clash with the desire of others to gain employment unless there are still others freely choosing to spend more than their income. If such clashes of interest were inevitable, there might be a temptation to defend the situation, perhaps on the grounds that one individual’s desire to save is no more nor less valid than another person’s desire for a job. But the situation is not irresolvable. To the contrary, it is within the capacity of a currency-issuing government to ensure that the desire of some to save is compatible with the desire of others for a job. Government as currency issuer is in a position to broaden the freedom of choice of all individuals, and so enhance liberty.
In short, there are clashes of interest stemming from macro level impediments – whether natural, connected to resource availability, or social, due for example to property rights or demand deficiency – that require government for effective resolution. Without such government involvement, liberty is diminished, not championed.