Milton Friedman once said that “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” The initial driver of this blog is a statement of similar ilk by a resident of my apartment who said that we don’t really need government–and we’d be better off without it. That’s what we’re hearing now from those of extreme Libertarian bent in Silicon Valley.
But in this blog I have three objectives that both include and go beyond those simplistic and stupid responses. I intend to suggest by historical data that government is one of our most precious human possessions. It’s the Chinese, today, who realize that government is what has made the West successful. Second, I want to show that the despairing and cynical belief that government is never going to change is utter nonsense. Finally, I want to point to the fact that the public and our politicians need to revisit the American experiment of government in today’s context, a task that few, thus far, are prepared to do.
A recent analysis on the state of the state by John Micklethwait and Adrian Wooldridge, writing in Foreign Affairs, addresses one historical and intensely relevant question: What is the state for? Overall, their paper responds to the three big issues above.
The authors set up their answers to the question by going to great lengths to point out that governmental cynicism is, well. . . nonsense. Western government has changed dramatically over the past few centuries, usually “because committed people possessed by big ideas have worked hard to change it.” They point out that until the sixteenth century China led civilization, but after that the West pulled ahead “thanks to three (and one-half) revolutions in government that leveraged the power of technology and the force of ideas.”
The first revolution, taking place in the sixteenth and seventeenth centuries, brought order to the blood-drenched war and chaos of the West with the creation of nation-states. Thomas Hobbes, born in England in 1588, deconstructed society into small pieces in his masterpiece, Leviathan (1651). He figured out that life in the “state of nature” was a trap that fomented a “war of every man against every man.” The only way to deal with the problem, he decided, was to create a state with the function of wielding power in the service of justice for all. His liberal thinking was the first to build upon the notion of a social contract in the form of a parliament. “He had no time for the divine right of kings or dynastic succession.”
Driven by the Industrial Revolution, along with its technological and economic advances, people poured into massive cities, supported by the railroad system. So it “made sense to concentrate power in the hands of an efficient central bureaucracy” that could provide security and protection for the people.
The second revolution, paved by previous centuries, began with the revolutions of France and America toward the end of the eighteenth century and throughout the nineteenth century. It was John Stuart Mill who believed that freedom, rather than security or protection, should be at the heart of governance. He argued, therefore, that efficiency and open competition of ideas and trade would “reduce error, persuade people to take a more active role in society, and provide citizens with moral training.” The French motto, Liberte, egalite, fraternite is reflective of these commitments.
This lean-government spread over Europe and across to America, but did not last long. Mill’s frustration was that he’d hoped that poverty would be lessened significantly. But the older Mill grew the more it became obvious to him that poverty wouldn’t be lessened. Especially when “rich dunces enjoyed the best education and poor geniuses left school to work as chimney sweeps.” Sound familiar? Mill realized that his laissez-faire orientation stigmatized the poor and consigned them to workhouses. He decided that the state must do more. Indeed, Prime Minister David Lloyd Jones worried aloud that England couldn’t run “an A1 empire” with a “C3 population.” By this time, the Prussians had created a world-class educational system and put effective tariffs in place, creating serious competition for England.
In short, Mill believed that if “Henry Ford could invent a huge mechanistic assembly line for business, surely it was possible to do the same for government: to apply scientific management to the business of running the state and training its citizens.”
The third revolution moved beyond the singular notion of freedom to notions of the open competition of ideas and trade, creating a welfare state driven by the notion that government should be a companion to citizens, offering education, help when they lost jobs, health care when they got sick and pensions for the aged. This is the notion around which today’s “sprawling Western states were built.” These ideas of the sociologist and economist Beatrice Webb gradually pushed the UK toward socialism. Her key perceptions resulted in a vision of “homes, health, education, and social security.”
But by the 1970s, the US big government began to overreach, resulting in strikes, the Vietnam War, and economies “hobbled by stagflation. And Milton Friedman capitalized on these failures emphasizing his free-market approach.
The “half revolution” from the ideas of Milton Friedman built on the experience and belief of the failures of government, contrasted sharply with the perceived power of business, especially the pro-market ideas of Friedrich Hayek, resulting in an orientation to small-government conservatism. Friedman denounced almost everything of importance to the American left, including “government provided health care, public housing, student grants, foreign aid.” The foremost political leaders of his ideas were, of course, Ronald Reagan and Margaret Thatcher. Thatcher and Reagan’s ideas spread around the world quickly, winning Friedman’s battle for him.
But for all the talk of these people and the “’shredding of the safety net,’ the state remained far bigger under Reagan and Thatcher than anything that Webb could have imagined, and it has only continued to grow in the decades since they left office.”
So where are we today? For one thing, representative democracy is losing its luster. Our politicians increasingly make promises they can’t deliver, allowing themselves to be captured by special interests and diverted by short-term interests. And as those of us reading intelligent commentary recognize, Washington gridlock is a fundamental example of these failures.
The authors emphasize a number of major Western governmental failures: the unsustainable debt burden caused by numerous demographic and political problems, the rapid development of information technology that has often stumbled under under government direction, the rise of authoritarian governments in Asia that have become successfully competitive, the fact that Western governments do many things badly, and finally the distribution of huge sums to the relatively prosperous and little for the poor. These situations do little more than bring frustration and confusion to the masses.
Early on, I indicated that we need in-depth discussions of the role of government for a new context. What’s both obvious and frightening and confusing to many is that the Chinese and the Singaporeans have produced governments that successfully challenge the belief in free markets and democracy.
Although this crisis in Western liberal democracy has been brewing for decades, it has become more acute today for three reasons: the financial crisis and the unsustainable debt burden, the failure to effectively harness the rapid development of technology, and the track record of the Asians.
What this implies, as the authors state, is that we need to “follow China’s example and take good ideas wherever (we) can find them.” The authors’ conclusion is prescient: “it’s not yet clear whether the West will be able to summon the sort of intellectual and political energy that, for the past four centuries, has kept it ahead in the global race to reinvent the state.” But without a relevant, new model, we’re going to be behind the proverbial eight-ball.