The best, most humane way to dismantle the state is probably through a rapid and radical transformation. It’s an approach that some call “shock therapy.” But as preferable as shock therapy might be, reality typically offers much more limited options to roll back political power. Where to begin disintervening depends, of course, on the feasibility of those options.
But there are two other factors to consider. The first is whom we might wish to protect in the process of disintervening, and the second is the degree to which it’s even possible to protect them, given the limits of our ability to actually foresee the consequences of what we’re doing.
The Knowledge Problem in the Growth of Government
Much of the work in public choice and in Austrian political economy focuses on government growth. That’s understandable, as expanding political power poses such a threat to individual freedom and voluntary social cooperation. And, of course, government growth is much more common than government contraction.
Austrians in particular recognize that a fundamental problem facing any policy maker is the knowledge problem. Predicting even the most significant consequences of a new intervention — positive and negative — may be impossible.
But there have been important episodes in which the state has shrunk dramatically. Examples include New Zealand, Poland, and the Czech Republic in the 1990s and Sweden more recently. It’s important to realize, however, that the reformers in all of these countries encountered consequences that they could not have foreseen. The knowledge problem works both ways, and it seems to become more of a problem the less radical the reforms are. Shock therapy minimizes these complexities and is, in that sense, preferable to piecemeal change. (I’ve publishe…