The Incessant Growth of Government Bureaucracy
by Gregory Bresiger, Posted January 18, 2011
This article originally appeared in the September 2010 edition of Freedom Daily.
The natural progress of things is for liberty to yield, & government to gain ground. -- Thomas Jefferson
"It is far easier to introduce a government program than to get rid of it."
Those were the words of a former federal bureaucrat who had worked in World War II in the Office of Price Administration (OPA). He was quite successful. His wartime work has had an effect on all wage earners to this day.
As an OPA bureaucrat, he devised the withholding tax. That was also known as the "win the war" tax. Withholding was supposed to conclude once the war was won. Yet withholding like so many other government programs and bureaucracies goes on even though the circumstances that gave rise to it ended long ago.
It is the same with just about all government programs and the bureaucracies that administer them, successful or not, popular or detested. They never end. Withholding, for example, has lasted for so long that almost no one can remember when employers didn't withhold taxes.
That OPA bureaucrat was none other than Milton Friedman. In his book of memoirs that he wrote with his wife, Rose, Two Lucky People, Friedman wrote that his wife would kid him for the part he played in making possible "overgrown government."
Why are government bureaucracies resistant to the same forces of change that remake the competitive private sector?
In the 1950s and 1960s, popular socialist economist John Kenneth Galbraith remarkably complained in bestsellers such as The Affluent Society and The New Industrial State that government bureaucracies were starved of resources. He also warned that big American corporations had virtually omnipotent pricing power and, thus, could practically dictate to consumers how much they would have to pay for their products. He talked about the "dependence effect," by which consumers were led to buy things they never really wanted. If one accepted those notions, he would think that corporations had a power that could guarantee permanent survival and success.
Yet every day in the private sector we see this disproved. Big stores go out of business. We frequently see supposedly invulnerable corporations humbled or driven out of business.
Yet what public-sector bureaucracies, either under Republicans or Democrats, have died recently? Or, for that matter, ever?
Why haven't government bureaucracies, many of which are hated or are obviously incompetent, such as the IRS or Amtrak, gone out of business, as have countless private entities that have been outdone by competitors?
The nature of government bureaucracy
Government bureaucracies, unlike private, competitive firms, sustain themselves with taxpayer dollars, and they are almost always successful in convincing policymakers that they deserve more power and more money.
The nature of government bureaucracy is to expand in good times and bad. Oftentimes, it uses the citizen's own tax dollars to convince him that he needs much more of the same that any cut in funding or authority would be the height of recklessness.
For instance, not long ago in city libraries in Brooklyn, Manhattan, and Queens, I found handouts everywhere urging people to act and act now to save a public bureaucracy. Here was what one said:
- Library Day at City Hall. Thursday, May 28, 2009. Fight Massive Budget Cuts Save Our Libraries! Travel to Manhattan by chartered bus. Orientation and materials for your own information, and to share with your City Council Members. Light breakfast provided.
And what was the nature of the orientation? Somehow, I don't think the city's and state's notorious overspending practices were discussed. By the way, as of this writing no significant cutbacks have taken place in those library bureaucracies, which maintain their same schedules.
I don't have any answers. Repeated calls to the Queens County Library CEO Thomas W. Galante were never returned. Government bureaucracies are not accountable to the average citizen, whom they supposedly serve.
How am I doing? Great!
While cutbacks go on in the private sector, bureaucrats often use taxpayer money to tell citizens how great they are and that any suggestion of waste or incompetence is ridiculous. That is tantamount to letting me not my private-sector boss do an evaluation of how good I am as a worker. Why can't public bureaucracies have the same evaluation standards as the private sector has?
The successful private-sector company survives only because it successfully competes today, tomorrow, and into the future. To succeed, it must constantly please finicky customers. Remember that customers, unlike taxpayers, aren't obligated to continue buying at the same business and often change their preferences.
The opposite is the case in government bureaucracies. Suppose you became disgusted with Social Security and the accounting gimmicks of its so-called trust fund. You are angry and vow never to "contribute" to Social Security again. Sorry, not allowed. You must pay into the Social Security bureaucracy whether you like it or not. Forever. Suppose you think Amtrak is a joke and swear you will never ride its egregious trains again. You can, but there's a problem: you will still pay for its incompetence through your tax dollars, regardless of whether or not you ever ride it again.
But government-bureaucracy supporters, economist Ludwig von Mises warned, resist all these comparisons to the private sector, since they make the government sector look so bad.
Again today, as in so many previous economic crises, the public sector and its allies have been able to convince lawmakers and mainstream media that it would be an injustice if the public sector were reduced even in the midst of a deep recession.
"Bureaucracy," Mises wrote in his book of that name, "is imbued with an implacable hatred of private business and free enterprise." But the greatest danger of government bureaucracy, Mises argues, is that the bureaucratic mindset may start to infect the private sector.
"The trend toward bureaucratic rigidity is not inherent in the evolution of business. It is an outcome of government meddling with business," Mises writes. Bigger and bigger government bureaucracies will justify themselves by reference to the supposed evils of the private sector.
It doesn't matter that times may be difficult or prosperous; the assumption of ruling Democrats and Republicans is that the taxpayers can always afford more bureaucracy. For instance, between 1994 and 2004, a conservative, supposedly anti-government era in America, the number of state and local government workers rose from 13.4 million to 15.8 million workers.
So government bureaucracies are resistant to the same economies that the market imposes on businesses operating in the private sector.
For example, here in New York State, the state government, despite all its considerable taxing powers, is once again grappling for dollars. The bond market gives state bonds an unsurprisingly poor rating. Yet the latest proposed state budget calls for an increase in spending. The public sector experiences none of the pain that individuals and business must accept.
Having lived through the Rockefeller years in New York in the 1960s and 1970s, I've seen this happen many times. (Governor Dewey, before Rockefeller became governor of New York, told the young Rockefeller, "Nelson, I like you. But I don't think I can afford you," according to Thomas Dewey and His Times, by Richard Norton Smith.)
Yet the taxpayers must pay for the policies of elected officials who frequently find it convenient to get along with bureaucracies at the expense of what William Graham Sumner called the Forgotten Man, the average taxpayer.
As I write these words, New York transit workers and city teachers are being given raises by units of government that are running huge amounts of red ink and must take more from the overburdened taxpayers, many of whom plan to retire to places with lower taxes. Meanwhile, we hear every day of the slow growth of salaries in the private sector.
Many private-sector workers have had to accept pay cuts in lieu of losing their jobs. Yet government bureaucracies, even in bad times, prosper owing to one interesting fact: All they must do is win just once and then they will go on forever.
http://www.fff.org/freedom/fd1009e.asp
xxx
This article originally appeared in the October 2010 edition of Freedom Daily.
A government bureaucracy may be difficult to establish, as supporters of expanded Obama health-care socialism discovered. But the friends of collectivism should take heart. No matter how many times people reject their calls to venture farther down the "road to serfdom," no matter how many times American outrage is expressed at town halls across the nation, no matter if socialists lose a million times, they just have to win once. Then, ostensibly, they win forever.
If they are triumphant, the collectivists the supporters of bigger government have history on their side: The history of government bureaucracies is that once they are established, it is well nigh impossible to dismantle them or even prevent them from swallowing more resources.
But socialists beware: the bureaucratic monster you create can become unmanageable and turn on you. That is because government power through permanent, seemingly untouchable bureaucracies can have unintended consequences. And the government bureaucracy, once established, can trump party and the elected officials supposedly in control, regardless of whether the government is left or right.
Here in New York we hear constant complaints from city and state officials about the bureau cratic entity that runs the subways, the Metropolitan Transportation Authority (MTA). No one in city hall or in the state legislature seems able to control this state agency. Few citizens know who sits on the MTA board, which is an important part of their lives whether they recognize it or not.
Mayor Michael Bloomberg, running for re-election and looking for a good issue, promised to reform the MTA and ensure that "the taxpayer gets his money's worth." But what's to reform? The MTA bureaucracy is supposedly the servant of the elected officials. They created it. They empower it. And since the MTA consistently loses money, the lawmakers fund it with citizens' dollars.
With apologies to Mayor Bloomberg, there is no reform of government bureaucracies. They can't be reformed, although vote-hungry pols will constantly say they have the magic reform formula.
Their promises are like the promises of the drunk who says just one more drink and he'll stop drinking. The sudden I-got-religion lawmakers promising bureaucratic reform resemble W.C. Fields, who said, "Now, don't tell me you can't give up drinking. I've done it thousands of times."
And, of course, there is a structural problem in reforming public bureaucracies. Government bureaucracies such as the MTA and thousands of others usually become so big that it is a delusion to think that despite the power of the purse even the most popular elected officials can control those powerful entities and the people who run them. Some actually go through the charade of pretending to control the huge bureaucracies. But the bureaucrat usually can outmaneuver them, something the lawmakers hope the voters never understand.
The power of bureaucrats
Here is the ghost of the famed New York builder, Robert Moses. As detailed in Robert Caro's superb biography The Power Broker, Moses, as an über bureaucrat with countless city and state posts from the 1920s to 1960s, changed the landscape of New York, usually for the worse.
Nevertheless, most elected officials did not dare to cross him and most citizens had little idea of the extent of his power until he was bulldozing their homes for super highways. Yet Moses was a bureaucrat liberals once loved just as today's critics of the MTA once applauded its creation decades ago as a great reform that would bring planning sanity to the city's and state's transportation networks.
Moses was a bureaucrat who delivered new roads and parks just in time for elections. So pols conveniently forgot that he violated laws, ruined lives, and destroyed many neighborhoods thanks to his unchecked bureaucratic power, something even socialists have discovered can be dangerous.
Richard Crossman, a cabinet minister in the British socialist government of the 1960s, complained in his memoirs that the top civil servant in his department had more influence and power than the cabinet officials. Yet the latter, at least in theory, were the bosses.
"The department was run as her personal domain," he writes of that particular civil servant in his Diaries of a Cabinet Minister. He concluded, "And that is why it was badly run and badly organized."
Crossman conceded that cabinet secretaries couldn't even understand the complex public entities run by career bureaucrats. So how can one even know whether those bureaucracies achieve their goals?
The people running public entities, whenever a critical word is written or there is the least suggestion of a cutback or of privatizing some of their functions, will always insist that those are not serious options, and they are usually backed by mainstream media elites
For instance, here in New York, I have written articles proposing privatizing various functions of the hated MTA. All are rejected. The idea is unthinkable even among people one would expect to embrace it.
Indeed, a recent letter from a Manhattan Institute scholar tartly informed me that there is no history of private entities' making money in the subways. His comment simply ignored the golden era of the subways 1904–1917 when private management companies made money and established a system described as an engineering marvel.
Why is there a rejection of any private alternative? Many people don't know of private-sector successes. Therefore, many just assume that that there is no private alternative, just as many people have no idea that there was a time when there was no IRS or withholding. The individualist tradition, especially in its most thrifty and successful products and services, is a direct challenge to the government bureaucracy and its self-perpetuating mindset, which, once established, is "we must always grow."
Can anyone cite for me an example in which the leaders of a government department or commission ever told lawmakers, "We can get by on less," or, "This department is no longer needed"?
Silence
This perpetual expansion tendency, Mises tells us in Bureaucracy, is the opposite of what an effective manager in the smallest unit of the private sector does.
"[If the private manager] wastes the concern's money, he jeopardizes the branch's profit and thereby indirectly hurts his own interests.... Thrift must be imposed on him by regimentation."
But bureaucrats under fire will often explain that the general public doesn't understand what various departments do. They also insist that our lives would be made miserable without Amtrak, a government postal monopoly, or any other government bureaucracy.
Government bureaucracies, unlike most of the private sector, aren't subject to a system of profit and loss. And given the well-advertised failures of bureaucracies to achieve their goals, wouldn't it make sense to end as many as quickly as possible?
Unfortunately, the bureaucratic mentality, supported by mainstream media, won't allow even that idea to be debated, as I have found here in New York. The idea of government's going on a crash diet, of slimming down just as a corporation in trouble sells off money-losing divisions and lays off workers, seems unthinkable. But why is government contraction off-limits at a time when the government is going deeper in the red?
There are countless untapped opportunities for expanding economic liberty -- for dramatically reducing public spending and returning money to the pockets of overtaxed Americans
For instance, why do Americans need a government post office with monopoly power over the delivery of first-class mail? Isn't it superfluous in an electronic age in which people can pay bills online and communicate immediately through email or cell phones? Besides, wouldn't private companies rush in to offer first-class mail services if the United States Postal Service lost its legal monopoly?
Why are there far more people in the U.S. Agriculture Department today than a century ago? Surprisingly, the department was, Stephen Moore points out in Government: America's Number One Growth Industry, the fastest-growing government department in the 1980s. He notes that farm-program spending went from $4 billion to $30 billion from 1980 to 1986.
Agriculture plays a smaller and smaller role in our post-industrial economy. So why do Americans need an Agriculture Department?
Why does the country need a national passenger railroad system, when relatively few people ride Amtrak and its faux-high-speed train, Acela? Back in the 1970s politicians said that Amtrak would provide "the greatest business turnaround in business history," as documented by Joseph Vranich in his book End of the Line. Once he had been a supporter of the system, but now he calls for Amtrak's breakup. Private-passenger railroads, before they were regulated to death in the 1970s, made money.
There's no reason that private railroads, using new technologies such as Maglev, couldn't offer high-speed services. Or rather, they could if they were allowed to charge a market rate, which many people, tired of the hassles of air travel, would be glad to pay for efficient and fast service.
The Rural Electrification Administration, created in the 1930s, goes on and on.
Federal aid to education hardly existed generations ago, yet today the U.S. Department of Education, which was created in the Carter administration as a political payoff to teachers' unions, is a huge, powerful force that dwarfs local school districts.
But the government's education bureaucracy, the same as all other bureaucracies, is a gross failure despite repeated attempts to reform it.
"It's no surprise that our school system doesn't improve; it more resembles the communist economy than our own market economy," said Albert Shanker, a former leader of one of the teachers' unions that helped create the U.S. Department of Education.
The United States got along quite well without a federal Education Department for two centuries. Why can't Americans do so again?
The U.S. Defense Department's budget is bigger than ever, and some might say more ineffective than ever in an age of terrorism. Much of its budget is designed to confront a Soviet enemy that no longer exists with carrier task forces that are cumbersome and whose appropriateness should be debated.
Why do they survive?
Even those major politicians who promise to rid us of at least some of these public bureaucracies can't be trusted to keep their promises.
Ronald Reagan, in 1980, exploited the disgust with big government's using its bureaucratic tentacles to run every aspect of Americans' lives. He ran on a platform of ending the U.S. Department of Education as well as the U.S. Department of Energy. Neither was ever in danger. Neither was ever cut back. Both go on and on, oblivious to whether there is a Republican or Democratic president or whether they are a burden on taxpayers groaning under ever-increasing debt.
Many people can sympathize with the theme of this article. Indeed, all kinds of people of different political philosophies tell horror stories of trying to deal with various byzantine government bureaucracies. And yet the poor service goes on and on.
The problem, in part, is that many elected officials can't control the bureaucracies that supposedly report to them, so how can they even know whether they are necessary? It is a problem as old as the modern welfare state and has been going on for some time.
Government bureaucracies become so powerful, Tocqueville warned more than a century and a half ago, that they can make all of us seem to be so dependent that we are lulled into thinking that they are the only answer to every problem.
"Such a power," he wrote in Democracy in America, "does not destroy, but it prevents existence: it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to be nothing better than a flock of timid and industrious animals, of which the government is the shepherd."
The problem is, while many can accept my analysis government bureaucracies are inherently inefficient and dangerous, and, as they get bigger, their problems compound they also fear the logical solution: dismantle them as fast as possible before any of them spends more taxpayer dollars.
But the problem of the government bureaucracy, the same as the woes of the old Soviet Union, is insidious. The solution requires drastic measures: Government bureaucracies need to be dismantled, not reformed.
Gregory Bresiger is a business writer living in Kew Gardens, New York.
http://www.fff.org/freedom/fd1010d.asp
No comments:
Post a Comment