Government Overreach in Times of Crisis: A Libertarian Critique

Mark Carney, former governor of the Bank of Canada, a few weeks ago quipped, "There are no atheists in foxholes, and there are no libertarians in a crisis." This claim, often used to justify expanded government intervention during emergencies, misrepresents libertarian principles. Just as atheists would dispute the former, libertarians firmly reject the latter. Carney’s remark reflects a common tactic: governments leveraging crises to expand their authority. Libertarianism—rooted in individual freedom and limited government—provides a critical lens to evaluate state overreach and mismanagement, particularly in areas like inflation, housing, national defense, and the judiciary.

The Misuse of "Crisis"

The term "crisis" is overused, diluting its meaning. Governments label nearly any issue a crisis to justify intervention, yet the data often tells a different story. For example, fentanyl overdoses in Canada are frequently called a crisis, despite causing roughly twice as many deaths as car accidents, which are rarely framed similarly. Overusing the term desensitizes the public, undermining responses to genuine emergencies. For this discussion, we’ll focus on two widely recognized issues—inflation and housing—alongside federal responsibilities like national defense and the judiciary, where government failures, not libertarian principles, are the root cause.

Inflation: A Government-Created Problem

Rising prices, driven by monetary policy, stem directly from the Bank of Canada, a government institution. Between 1770 and 1910, before the U.S. Federal Reserve existed, prices gradually declined in the U.S., improving living standards. The modern notion that 2% annual inflation is necessary lacks evidence and effectively impoverishes people over time. It’s absurd for the government, which fuels inflation through money supply expansion, to position itself as the solution. Libertarians argue that the entity causing the problem cannot be trusted to fix it.

Housing: Supply, Demand, and Mismanagement

Housing affordability reflects basic supply and demand dynamics. The federal government, which controls immigration, has allowed inflows that far exceed Canada’s housing capacity. This mismatch drives up prices, creating a so-called housing crisis. Blaming market forces ignores the government’s role in mismanaging immigration policy. Expecting the same government to resolve this issue is illogical when its policies are a primary cause.

National Defense: A Neglected Duty

Canada’s military is in disarray, underfunded for decades and likely incapable of mounting significant resistance to an invasion. Even libertarians, cautious about overusing the term "crisis," recognize this as a genuine failure. Unlike Carney’s caricature, libertarians support effective government in core functions like defense. The military’s dire state results from political neglect, not libertarian advocacy for limited government.

The Judiciary: Inefficiency and Neglect

The judicial system is equally troubled. Lawyer Katherine Marshall has described it as “broken,” with court delays stretching years and trials stalled by a lack of judges or courtrooms. This inefficiency stems from government neglect, not libertarian policies. The affected population lacks the political clout to demand reform, leaving the system dysfunctional and eroding public trust.

Healthcare: A Provincial Case Study

Though under provincial jurisdiction, healthcare exemplifies government-induced crises. Patients endure years-long waits for critical surgeries due to state monopolies that restrict private options. As Ludwig von Mises observed, “The government creates problems which require government intervention to solve, and in doing so, creates more problems.” This cycle stifles innovation and efficiency, leaving Canadians underserved.

Exploiting Crises for Control

Politicians often exploit crises to expand power. As Rahm Emanuel famously said, “You never let a serious crisis go to waste.” By stoking fear, governments justify encroachments on freedom, promising solutions that rarely deliver. The belief that surrendering liberties ensures safety is misguided and often leads to further inefficiencies.

A Libertarian Path Forward

Libertarian principles—free markets, individual choice, and limited government—offer solutions. Privatizing aspects of healthcare, streamlining judicial processes, and prioritizing core functions like defense could address these issues efficiently. Crises are not a mandate for more government control but a call for smarter, accountable governance that respects individual freedom.