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The Case for Big Government
That's the title of the forthcoming Jeff Madrick book. "Don't we already have big government?" was my first reaction. This book is a good summary of one point of view, but if you're already familiar with the basic arguments it won't extend your understanding of the debates. There's not much on the public choice arguments (e.g., self-serving special interests and irrational and underinformed voters) against growing state power, only a general sense that we "should" do good things with government. Nor is there much realization that Americans are skeptical about government, in large part, because of their daily experiences with it. We're also told that many of the proposed progressive measures will nearly pay for themselves.
Yana's reaction was: "Why didn't he publish it with a government press?"
Posted by Tyler Cowen on August 28, 2008 at 06:35 AM in Books | Permalink
Comments
Yana's reaction was: "Why didn't he publish it with a government press?"
I am glad that Yana's (excellent) sense of humor is more explicit than Tyler's.
Posted by: at Aug 28, 2008 7:54:02 AM
"Political conservatives have long believed that the best government is a small government. But if this were true, noted economist Jeff Madrick argues, the nation would not be experiencing stagnant wages, rising health care costs, increasing unemployment, and concentrations of wealth for a narrow elite."
Who said that was the test? What's wrong with stagnant wages under low inflation and exploding globalization? What's wrong with increased healthcare provision? Since when is unemployment secularly increasing? Why would wealth concentration bother me?
I liked this one: "A practical call to arms, The Case for Big Government asks for innovation, experimentation, and a willingness to fail."
Yeah, that's the problem with our current government...paralysis by perfectionism!
The book I'd like to see: Under what circumstance would we be able to compare the value of "good things" the government does compared to the market? How are the things the government would do with more funding different and better/worse than private interests?
If we had a system where people got to vote based on how much taxes they paid, or shares they bought in USCorp, we could approach rational incentives for investment. More accountability for politicians. Competing bureaucracies. Which segments are closest to this now? Postal service? Constituent service? Which are farthest apart? We have a government about 30% of GDP. But it's 0% in some sectors and 100% in others. Are the distributions "right?"
I see so many issues today, Social Security privatization, tax cuts, etc. as a question of how efficiently the money be spent in private hands versus public hands. It would be interesting for someone to approach the topic straight up, if it could be done objectively at all. That's not me, and I suspect not this book, but I might read THAT book. I suppose that's the public choice school.
http://en.wikipedia.org/wiki/Essays_in_Positive_Economics
If you could make the case that the government was doing a good job, then yes, you could make the case that further investment in that segment would be a good value. But can you make that case today?
Noam Chomsky for example listed the ability for public entities to run at a loss indefinitely as a feature, so coming to terms with what constitutes a good result is problematic. His reasoning seemed to be that by running at a loss they could, for example, provide electricity to the poor. He's clearly not an economist (clearly when you listen to him discussing economics), but he is a cunning linguist and verbalizes a lot of the concerns I hear from lefty economists. So, I suspect that you could set up a chart with a normalized absolute value on the X-axis and relative equality on the Y-axis that may come close to an objective evaluation.
Posted by: Andrew at Aug 28, 2008 8:16:29 AM
Are there any commonly used policial terms less useful than "big government" and "small government"?
Compared to what?
Posted by: Dan Tarrant at Aug 28, 2008 8:59:07 AM
My assumption is that he, and everyone else, will mean by "Big Government" the Federal Government, which may be big but is rather weak, thanks to the Founders. The bulk of our government is at state and local levels.
Posted by: Bill Harshaw at Aug 28, 2008 12:42:44 PM
We are a big complex country and we are going to have a big government whether we want one or not. There are reasons for government starting with protecting you from the crazy angry guy down the street with a tire iron.
We are not going to see government go away anytime soon. So big or small, what I want to see is a government well administered. What I want to see is a recognition that we are going to have a government and therefore, we should strive to make it work as well as it can.
Having people run the government who don't believe in government, who want to drown it in a bathtub, is just crazy. Talk about throwing out the baby with the bath water. Only those who seek plunder succeed in such a scenario.
I've worked in big corporations and they are incredibly inefficient, too. Should we do away with these as well? Be okay with me; they're just authoritarian, anti-libertarian, structures anyway.
Posted by: lxm at Aug 28, 2008 2:21:04 PM
This brings up a good question kind of related to this:
How is it that the stereotype is still of the U.S. being more 'free market', 'small government', 'less interventionist', blah blah blah, when it so obviously not true?
I mean, fairly good statistics are published of U.S. government spending, and the spending of other governments... ditto with comparing regulation. There is some pretty objective data that will show that the U.S. social spending is pretty close to Scandinavian countries, that the U.S. has one of the most regulated markets in the world, has extremely high corporate tax rate and capital gains tax and is most definitely interventionist (and I am not even beginning to discuss the military side of things).
Someone has to be insane, absolutely insane, to somehow imply that the U.S. has small government. The U.S. is the biggest government in all history. How can people really imply, with a straight face, that the U.S. isn't "big government"?
Posted by: Rex Rhino at Aug 28, 2008 4:31:19 PM
So, does this mean you have already read the book? Amazon currently has it listed as unreleased.
Posted by: Robert Olson at Aug 28, 2008 5:28:44 PM
I worked in and retired from the civil service. I have been in the belly of the beast. There are very, very few people in government service "who don't believe in government." Don't be fooled. The people who "run the government" are not really the politicians. The real agenda setting and decision making powers are wielded by interest groups and bureaucrats. Creative, skilled and productive people choose to stay away from the public sector. Government, in general, has the same imperative as any private sector organization - institutional survival and a growing market share. One could, in fact, argue convincingly that the business of government is one of the most successful enterprises in America since 1929, after all it has the competitive advantages of the powers to tax and employ armed intimidation. The growth in size, scope and spending of the Imperial Federal Government, and its outsourced dependencies in the state capitals, hardly ever even slows down and never, never reverses.
Posted by: boqueronman at Aug 28, 2008 7:24:32 PM
The big government vs small government argument is a false choice. Both conservatives and liberals believe in big government. The difference between conservatives and liberals on this issue lies in how big government is used and for whose benefit. Liberals use big government as a tool to redistribute wealth. Conservatives use big government as a tool to concentrate it.
Posted by: Thelonious at Aug 28, 2008 9:16:46 PM
Liberals use big government as a tool to redistribute wealth. Conservatives use big government as a tool to concentrate it.
'Liberals' (or really, Socialists) *CLAIM* to use big government as a tool to redistribute wealth. In reality liberals use big government to concentrate wealth in the hands of a superficially different, though largely same, elite.
Concentration of political power is going to result in the concentration of wealth. Those in power, consciously or unconsciously will use that power to benefit themselves. People will naturally think that what benefits themselves is also "for the greater good". Every political faction thinks they are doing what is "best for the people". The end result is that wealth will tend to concentrate in the hands of those who exercise political power.
The arrogant "We are the good guys and they are the bad guys - We want to use power for good, while they want it for evil" one dimensional thinking is really frightening! Do you really have such a juvenile Star Wars morality view of the world?
No, no, problems don't happen because smart people with the best intentions can never have perfect information and thus make disastrous mistakes... No, it isn't that people are biased towards their own interests even when they are trying their hardest to exercise power in a fair and impartial matter... It is because the other side is evil and corrupt, and our side is good and trustworthy!!! It is all so simple!!! The key to social justice is to crush our enemies and seize control!!!
Posted by: Rex Rhino at Aug 29, 2008 1:14:29 AM
Rex Rhino, I especially liked your last paragraph.
Jeff Madrick seems to have finally figured it out, which people should point guns to which people to get things done. Screw calculation and information problems and personal preferences and all this stuff, we're entering a new golden age!!
Posted by: theblob at Aug 29, 2008 8:16:36 AM
