Chris Edwards: “Over the decades, federal efforts to subsidize and manipulate the economy have failed over and over again”

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Chris Edwards: “Over the decades, federal efforts to subsidize and manipulate the economy have failed over and over again.”

November 6, 2013 10:04AM

The Sickness of Government

People shouldn’t be surprised about the botched roll-out of Obamacare and all the damaging effects of the law that are now generating headlines. Over the decades, federal efforts to subsidize and manipulate the economy have failed over and over again.

That lesson has been driven home to me in researching Downsizing Government. Farm policies, for example, have been an ongoing boondoggle for more than eight decades. President Herbert Hoover’s Federal Farm Board blew $500 million trying to stabilize crop markets, but it did the opposite by inducing overproduction and depressing prices. Every farm bill since then—including the one moving through Congress right now—has been based on two very dumb ideas: that farm businesses need welfare and that agriculture needs government central planning.

I recently came across “The Sickness of Government,” (PDF) a 1969 essay by famed management theorist Peter Drucker. It is strikingly relevant to the problems we see in Washington today from Obamacare, to farm programs, to IRS abuse, to NSA spying. Unlike, say, Ayn Rand–who at the time was writing about government from the standpoint of individual freedom–Drucker was writing from the practical perspective that Big Government simply wasn’t working.

Here are some excerpts from Drucker, but his whole essay is worth reading:

“Government surely has never been more prominent than today. The most despotic government of 1900 would not have dared probe into the private affairs of its citizens as income tax collectors now do routinely in the freest society. Even the tsar’s secret police did not go in for the security investigations we now take for granted.”…

“For seventy years or so – from the 1890’s to the 1960’s – mankind, especially in the developed countries, was hypnotized by government. We were in love with it and saw no limits to its abilities, or to its good intentions.”

“This belief has been, in effect, only one facet of a much more general illusion from which the educated and the intellectuals in particular have suffered: that by turning tasks over to government, conflict and decision would be made to go away. Once the “wicked private interests” had been eliminated, a decision as to the right course of action would be rational and automatic. There would be neither selfishness nor political passion. Belief in government was thus largely a romantic escape from politics and from responsibility.”

“The greatest factor in the disenchantment with government is that government has not performed. The record over these last thirty or forty years has been dismal. Government has proven itself capable of doing only two things with great effectiveness. It can wage war. And it can inflate the currency.”

“The best we get from government in the welfare state is competent mediocrity. More often we do not even get that; we get incompetence such as we would not tolerate in an insurance company. In every country, there are big areas of government administration where there is no performance whatever – only costs.”

“Modern government has become ungovernable. There is no government today that can still claim control of its bureaucracy and of its various agencies. Government agencies are all becoming autonomous, ends in themselves, and directed by their own desire for power, their own narrow vision rather than by national policy.”

“We are very good at creating administrative agencies. But no sooner are they called into being than they become ends in themselves, acquire their own constituency as well as a “vested right” to grants from the treasury, continuing support by the taxpayer, and immunity to political direction. No sooner, in other words, are they born than they defy public will and public policy.”

“Nothing in history, for instance, can compare in futility with those prize activities of the American government, its welfare policies and its farm policies. Both policies are largely responsible for the disease that they are supposed to cure.”

In the essay, Drucker’s solution for government is decentralization and “reprivatization,” which today is called privatization. Based on his views in this article, he is no libertarian. His conclusions about government are practical in nature, stemming from his long experience studying how organizations work.

I find it depressing that more people don’t share my understanding of individual freedom, the Constitution, and limited government. But it is also depressing that Drucker-style common sense ideas about government failure have so little penetrated the nation’s governing elite. After all these decades, too many people are still “in love” with government and, indeed, “hypnotized” by it, as Drucker noted.

For more of Drucker’s analysis of government, see this 1995 article on Al Gore’s Reinventing Government effort.

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By Everette Hatcher III | Posted in spending out of control | Edit | Comments (0)

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