What is a Limited Government?
A limited government has limited control over its citizens and economy, protects individual rights, and separates branches of power so that no single one can become too powerful.
A limited government is one whose power over its people and economy has limitations. Leaders are usually bound by a constitution that protects the civil rights of citizens. Different branches of government are assigned separate powers, and each branch can limit the power of the others so that no single one becomes too dominant. The US Constitution both limits and grants governmental powers. Countries like England, Australia, Canada, and Japan also have limited governments. Historically, absolutist governments gave one person, such as a monarch, complete power. Countries with interventionist governments today include Saudi Arabia and North Korea, where leaders control the media and economy, stamp out criticism, and often deny citizens civil liberties.
“We The People.” This opening of the Preamble to the US Constitution compresses the idea of popular sovereignty into a single phrase. The government is limited because it only exists with the will and consent of the people.
Limited government is like work-life balance...
Too much work can affect your well-being and restrict your ability to enjoy life. But too little can destroy your household and lifestyle. Similarly, too much government can limit the market economy and freedom of choice for individuals. But too little government can give companies too much leeway to pollute and use up limited resources or allow other abuses.
A limited government is one bound by law to have limited control over its citizens and economy. Power is divided among separate branches, each of which has its power constrained by the others. Limited governments are usually held accountable by a constitution and democratic system and bound to protect civil rights and individual liberties.
The US Constitution both limits and grants powers to the federal government and the states. The Bill of Rights (the first 10 amendments to the Constitution) spells out that powers not explicitly granted to either level of government are reserved for the people. Many other examples of limited governments exist today, such as Canada, England, Australia, Japan, and Mexico.
Countries that don’t have limited governments tend to criminalize criticism of leaders, control the media, and limit citizens’ rights. Some modern-day examples include:
The US Constitution didn’t invent limited government. The idea was born out of a long history of experience with alternatives — too much government or no government at all.
Polybius, a Greek historian, argued in the second century B.C. that a central government should consist of a balance of powers, each with a separate role to avoid despotism (where a single authority has absolute control).
The Magna Carta (The Great Charter) of 1215 gave all free men (or landowners at the time) the right to justice and a fair trial by the people. This idea is incorporated into English law today.
The American Revolution (1777-1783) was a long struggle to break free from the power of the British Empire. When the Founding Fathers drafted the US Declaration of Independence in 1776, Thomas Jefferson included two essential ideas:
All men have certain unalienable rights
Governments get their authority from the consent of the governed
Jefferson was influenced by the writings of Enlightenment philosopher John Locke. He and his contemporaries were trying to figure out how a government could prevent people from violating others’ rights while still protecting everyone’s individual liberties. An overview of their arguments goes something like this:
Thomas Hobbes argued that people needed to be controlled by an absolute government because they’re selfish and naturally violate other people’s rights, which leads to war and chaos (1651, Leviathan).
John Locke insisted that humans are naturally free and equal and that they have the right to life, liberty, and property. Locke believed that if people could elect their leaders with a social contract, the government would protect those rights because citizens could replace elected officials if it didn’t (1689, Two Treatises of Government).
Montesquieu believed that the best way to avoid a government becoming too powerful was to balance executive, legislative, and judicial powers bound by the rule of law (1748, The Spirit of Laws).
Jean Jacques Rousseau thought people should vote on all matters because they are sovereign. Their votes would express the general will of all the people, which would benefit the public good (1762, The Social Contract).
The Articles of Confederation, drafted in 1777, were the first attempt at creating a limited government in the U.S., but they went too far because they gave too much authority to the states. The federal government couldn’t tax states, and they started trade wars by imposing high tariffs on each other. States were worried about losing power to each other, but they didn’t want to lose power to a central government, either.
The aim of the Constitutional Convention of 1787 was to rewrite the Articles of Confederation. The result was the document we know as the Constitution. This gave power to both the states and federal government (in a system known as federalism) while protecting the rights of the people. Ideas from Enlightenment philosophers are woven throughout.
The idea that people need a government at all dates back in part to Hobbes. The notion that people have natural rights that need to be protected echoes Locke. Montesquieu’s ideas are reflected in the separation of powers, and Rousseau’s belief that the general will of the people can arise through their votes is embodied in democracy.
The framers of the Constitution wanted to limit the power of the executive office (the president) to avoid the tyranny they experienced under the kings of England. Limited government is outlined in the US Constitution in Article I in two primary ways:
1. Separation of powers:
2. Checks and balances:
Each branch of government limits the power of the other two in some way. There are many checks and balances built into the Constitution, including:
The legislative branch can make laws, but the executive branch can veto laws. However, the legislative branch can override the veto if it gets enough votes.
The legislative branch can make laws, but the judicial branch can declare those laws unconstitutional.
The judicial branch can interpret laws, but the executive branch can nominate judges and the legislative branch votes to confirm them.
Like most economies in developed countries with limited governments, the US has a market economy. This is an economic system mostly free of government control that is thought to regulate itself through competition in the marketplace, freedom of choice, and the laws of supply and demand.
The idea of a truly free market, or laissez-faire (government hands-off) economics, is rooted in John Locke’s ideas of individual rights to liberty, property, and the pursuit of happiness. The US Constitution incorporates Locke’s ideas but also extends some government control over the economy.
The Commerce Clause (Article 1, Section 8) gives the government power to regulate trade among states (and with foreign governments) and impose taxes. But it also empowers the government to do some other things to standardize the economy:
Today, some of the ways the US government influences the economy to achieve specific outcomes are through:
Taxes: Imposing higher taxes on some goods or services to discourage their consumption or certain behaviors (smoking cigarettes, for example)
Some critics argue that the word “commerce” in the Commerce Clause has come to mean anything related to economic activity. They think it gives the government too much power to regulate anything in the economy it wants.
Others argue that without the Commerce Clause, there would be no unity in the economy and no way to correct market failures, and we’d have a weak national government like the one created by the Articles of Confederation.
Economists will probably always argue about how much power the government should have to interfere with economic activity and freedom of choice. Luckily, the Constitution allows them the freedom of speech to do so.
What is Scarcity?
What is Opportunity Cost?
What is Gross Domestic Product (GDP)?
What is a Federal Housing Administration (FHA) loan?
What is the Dodd-Frank Act?
What are U.S. Government Bonds?
What is a Joint Venture (JV)?
A joint venture is an agreement between two or more people or companies to combine their resources and expertise in order to accomplish a specific business goal.
What are Accounts Receivable?
Accounts Receivable are funds owed to a company by customers who purchased goods or services on credit.
What is Industrialization?
Industrialization is the process through which an agrarian (farm-based) economy transforms into one based on mass manufacturing.
What is Accounts Payable (AP)?
Accounts payable (AP) is the division of a company responsible for paying suppliers and other short-term creditors. — It is the opposite of accounts receivable.
What is Brick and Mortar?
A brick-and-mortar business is one that has a physical location where it offers products or services to customers in person.