Updated: Dec 17, 2021
Our current economy is more crony capitalist than it is free, and that is responsible for the majority of problems that some try to blame on capitalism.
The size and scope of the federal government.
Let’s start with the U.S. budget and overall size of government. As can be seen from the charts below (courtesy of the Cato Institute’s Chris Edwards), inflation‐adjusted government expenditures have grown steadily over the last several decades, while spending as a share of GDP has fluctuated but is still up since libertarians first “assumed control” of D.C. in the ’70s:
Most of this increase is driven by entitlements, which libertarians have of course been trying—mostly unsuccessfully—to reform for decades:
In terms of international comparisons, total U.S. federal spending as a share of GDP is larger than Ireland, Chile, Korea, Colombia, Switzerland, Costa Rica and Lithuania, and within a percentage point of Australia, Latvia, and Japan. In terms of just government health spending, the U.S. government spends more dollars per capita than, well, basically everybody:
Much of this spending is captured in the dramatic rise in federal subsidy programs between 1970 and 2015:
… and the tens of millions of Americans today receiving some form of federal support:
Then there’s the debt—another longstanding libertarian priority and one that, per the latest CBO figures, pretty much speaks for itself:
The administrative state.
Despite some prominent “libertarian” deregulation victories (airlines, telecommunications, banking, and transportation, for example), the regulatory state’s overall story is one of slow and continued expansion. The Mercatus Center’s regulation project provides one example, in counting just how long it would take a person to read the entire Code of Federal Regulations:
The Competitive Enterprise Institute provides another metric, in final rules issued in the Federal Register:
CEI adds that “[g]oing back to 1976, when the Federal Register first began itemizing them, 204,802 rules have been issued.” Other, more complex metrics find similar growth—and impact—of the administrative state.
This growth has been especially pointed at many of the agencies that libertarians most vigorously criticize, including but not limited to the FBI, ATF, DEA (and federal drug control programs), ICE, and the TSA: