Anyone familiar with Jonathan Rauch and the concept of calcification in government?
Demosclerosis > <http://www.jonathanrauch.com/jrauch_articles/2005/01/demosclerosis.html> > > National Journal | September 5, 1992 > > *O*N APRIL 10, a group of kamikaze Senators marched to the chamber floor > with an alternative budget. What they got back was a stark demonstration of > the forces that are petrifying postwar democracy. > > "We do not seek to end entitlements, or even to reduce them," Sen. Charles > S. Robb, D-Va., told the Senate that day. "We do, however, believe that it > is necessary to restrain their growth. That is, first and foremost, what > this amendment does." > > Entitlement programs are check-writing machines whose subsidies are > mandatory under law: social security, medicare, farm supports, welfare, > countless more. Today they account for a staggering three-fourths of all > federal domestic spending. And so Sen. Peter V. Domenici, R-N.M., was doing > nothing more than acknowledging reality when he told the Senate, "If we do > not do anything to control the mandatory expenditures, the deficit will > continue skyrocketing." > > The bipartisan group -- Domenici and Robb, Sam Nunn, D-Ga., and Warren > Rudman, R-N.H. -- proposed phasing in a cap on over-all entitlement growth. > To avoid bringing the roof down on their heads, they exempted social > security. The other entitlement programs would collectively grow to account > for inflation and demographic changes, but no more. > > Within two hours of the four Senators' first detailed discussion of their > proposal, they were receiving telegrams, Domenici told the Senate, "from > all over the country, saying that this is going to hurt a veterans' group, > this is going to hurt people on welfare, this is going to hurt seniors on > medicare." > > "We were inundated," G. William Hoagland, the Senate Budget Committee's > Republican staff director, recalled during a recent interview. "Just about > every interest group you can think of was strongly opposed. It was very > dramatic how quickly they all came to the defense." > > The American Association of Retired Persons (AARP) called the proposal a > "direct attack"; the National Council of Senior Citizens "outrageous"; the > Children's Defense Fund, "unacceptable"; the Committee for Education > Funding, "unconscionable"; the Food Research and Action Center, > "devastating"; the American Federation of Government Employees, AFL-CIO, > "unfair and unconscionable"; the Veterans of Foreign Wars of the United > States, "totally unjust"; the Disabled American Veterans, "unconscionable"; > the American Legion, "incredible"; the Paralyzed Veterans of America, > "inherently unfair"; the National Cotton Council of America, the U.S. Rice > Producers' Group and the National Farmers Organization, "unfair"; the > American Postal Workers Union, AFL-CIO, "irresponsible, simple-minded," and > so on. > > On the floor of the Senate, the amendment's opponents moved to exempt > disabled veterans from the entitlement cap. The exemption passed, 66-28. > "We were going to exclude every Tom, Dick and Harry organization out there > before we were finished," Hoagland said. Rather than face death by > amendment, Domenici and the others withdrew their plan. That ended it. > > The Domenici group's effort fell victim to demosclerosis -- postwar > democratic government's progressive loss of the ability to adapt. > Demosclerosis is the most important governmental phenomenon of our time. No > surprise, then, that it is also the most explained. > > Liberals blame conservatives. "Government has stopped addressing > accumulated public problems," wrote the liberal journalist Robert Kuttner > in The New Republic recently: "a deliberate strategy of laissez-faire > Republicans, who don't believe in government." > > Conservatives blame liberals, alleging that left-wing ideology drives > liberals to cling brainlessly to every program ever adopted. "Reactionary > liberalism," the conservatives call it. > > Populists and business-bashers, such as the liberal journalist William > Greider, blame moneyed elites and corporate lobbying. Political analysts > blame the current state of the political system: divided control of the > government, the early-1970s reforms that dispersed power in Congress, the > breakdown of strong political parties, the rise of a professional political > class and so forth. > > The public blames, above all, "leadership," of the lack of it. A strong > leader (runs the theory), uncorrupted by politics as usual, could shake the > barnacles from the system. Thus the wave of support for Ross Perot. > > Many of the explainers' standard explanations are partly right. Yet there > are grounds to believe that none of the above fully comprehends what is > going on. > > People used to fear that democracy would dither fatally while dictators > and totalitarians swept the field. That fear turned out to be mistaken. Now > it appears that the vulnerabilities of democracy -- at any rate, of the > postwar style of democracy, with its professional activists and its large > and fairly powerful government -- are mundane and close to home. > > One such vulnerability is the tendency to rob the future to pay for > consumption today -- but that's another story. The other vulnerability is > creeping special-interest gridlock: that is, progressive sclerosis. > > Here in Washington, people like to think that sclerosis is temporary, or > at least is treatable with political reforms. Maybe not. If postwar > government is petrifying, the causes may be deep rather than superficial > and fundamental rather than merely partisan. In other words, demosclerosis > may be inherent and irreversible. > > GETTING ORGANIZED > > *I*N 1982, a University of Maryland economist published a scholarly book > called The Rise and Decline of Nations (Yale University Press). Mancur > Olson set out to explain, or partially explain, why societies tend to > ossify and stagnate as they age. Few people outside of academia took much > note of Olson and his ideas. To return to his book today, however, is an > eerie experience, for the theory of 1982 foreshadows 1992's politics of > frustration. > > In every society, Olson said, there are two ways for people to improve > their lot and grow rich. One is to produce more; the other is to capture > more of what others produce. Doing the latter is possible, but requires > political pull or marketplace power; attaining either of those requires > that people band together to form either interest groups or cartels. > > Interest groups can make their members better off by seeking subsidies, > tax breaks, monopolies, favorable regulations and so on. Postal workers > seek a monopoly on first-class mail; dairy farmers seek production controls > to jack up prices; and so on. Private cartels can make their members better > off by raising prices and barring newcomers from the market. Olson called > such beggar-thy-neighbor groups "distributional coalitions." > > So far, so obvious. Then Olson went on to the less obvious. Despite what > you might think, to organize an interest group or cartel is difficult. The > organizer will bear most of the start-up costs, and yet can expect only a > fraction of the benefits, which must be shared among the members. Members, > in turn, will be reluctant to join until they see that the group is > successful. Even then, they may stay out and let others do the work. > > As a result, Olson wrote, "organization for collective action takes a good > deal of time to emerge." Trade unions did not appear, for instance, until > almost a century after the Industrial Revolution. Farmers' groups didn't > appear in America until after World War I. Social security dates back to > 1935, but the AARP didn't appear until 1958. > > Once groups organize, however, they almost never disappear. Instead, Olson > wrote, "they usually survive until there is a social upheaval or other form > of violence or instability." Furthermore, over time the interest groups of > professionalize. This makes them still less likely to go away: Amateur > activists can always drop the cause and go home, but for professionals, the > cause pays the mortgage. > > The result, Olson concluded, is this rule: "Stable societies with > unchanged boundaries tend to accumulate more collusions and organizations > for collective action over time." Look at the AARP's membership curve (see > chart, p. 2001), multiply it by countless interest groups, and you get the > idea. > > Cartels have not proved to be the problem that Americans once expected, > thanks mainly to foreign completion. If cartels organize the domestic > market, as some say the Big Three automakers did informally through the > 1970s, fat profits lure in imports to bust the trust. > > But political pressure groups have the added power of the law, and are not > so easily undermined. These groups' effects are of two kinds, economic and > governmental. > > Economically speaking, entrenched interest groups slow the adoption of new > technology and ideas by clinging to the status quo. They distort the > economy, and so reduce its efficiency, by locking out competition and > locking in subsidies. As they grow, they suck more of society's top talent > into the redistribution industry. All in all, the economic costs can be > very large. (For a report on the "parasite economy" and its costs, see NJ, > 4/25/92, p. 980.) > > The other kind of effect is on government. The accretion of interest > groups, and the rise of bickering over scarce resources, Olson feared, can > "make societies ungovernable." > > Now the theory's darker implications come into view. "The logic of the > argument implies that countries that have had democratic freedom of > organization without upheaval or invasion the longest will suffer the most > from growth-repressing organizations and combinations," Olson wrote. If he > is right, then the piling up of entrenched interest groups, each clinging > to some favorable deal or subsidy, is an inevitable process as democracies > age. > > However, occasionally some cataclysmic event -- war, perhaps, or > revolution -- may sweep away an existing government and, with it, the > countless cozy arrangements that are protected by interest groups. > > If his theory is right, Olson concludes, "it follows that countries whose > distributional coalitions have been emasculated or abolished by > totalitarian government or foreign occupation should grow relatively > quickly after a free and stable legal order is established." > > Look at Japan and West Germany, where authoritarian regimes and then > foreign occupations swept away entrenched interest groups and > anticompetitive deals. "Economic miracles" followed in both countries as > resources were freed from groups that had captured and monopolized them. > (Catch-up growth, Olson says, can explain only a part of Japan's and > Germany's success.) By contrast, "Great Britain, the major nation with the > longest immunity from dictatorship, invasion and revolution, has had in > this century a lower rate of growth than other large, developed > democracies." > > Even in the United States, Olson said, the pattern applies. Statistical > tests comparing the 50 states showed that "the longer a state has been > settled and the longer the time it has had toaccumulate special-interest > groups, the slower its rate of growth." > > His hypothesis suggested a social cycle: > > A country emerges from a period of political repression or upheaval into a > period of stability and freedom. If other conditions are favorable, rapid > growth ensues. (South Korea and Taiwan, both emerging from dictatorship and > both showing rapid growth, would be in this stage today; China might be > next.) Gradually, interest groups organize and secure anticompetitive > deals. These deals accumulate, each being jealously defended. Over time, > growth slows and paralysis sets in. > > Although Olson was concerned mainly with the sapping of economic vigor, > his theory also has profound implications for the sapping of governmental > vigor. To see why, look at Washington in 1992. > > PARALYSIS > > *L*OOK, for instance, at what happened to the entitlement-cap proposal. > Anyone who doubts that today's professional interest groups can mobilize > almost instantly to defend their favorable deals need only consider the > fate of the move by Robb, Domenici and the others. > > Another case in point, one of many, is banking reform. The law that > regulates the U.S. banking system goes back 50 years or more and is largely > archaic. Banks are barred from a variety of money-making activities > (underwriting securities or mutual funds, selling insurance, branching > across state lines) that their modern competitors perform with impunity. > Thus hobbled, banks have difficulty finding profits. Weak banks, in turn, > weaken the whole financial system. > > In 1991, the Bush Administration sent Congress a banking reform package. > It was shot to pieces in what the New York Times called "a frenzied attack > by lobbyists. . . . Small bankers, fearing comptition, tore away interstate > banking. Insurance firms, fearing competition, tore away insurance > underwriting. Securities firms, fearing competition, tore away the proposal > to let banks sell stocks and bonds." > > In the end, National Journal reported, "every Administration proposal for > permitting banks to widen their business horizons -- every single one -- > was picked off in the carnage." (See NJ, 12/14/91, p. 3008.) The result is > surely one of the most bizarre policies of our time: As the 21st century > approaches, the country limps along with New Deal banking laws. > > What happens when you try to attack an anticompetitive arrangement? A > classic example of such an arrangement protects public school employees, > who enjoy a monopoly claim on tax dollars for education. Recently, two > provisions of the Bush Administration's water education reform package > attempted to nibble at this monopoly. > > Bush wanted to finance 535 new "break-the-mold" schools, both public and > private, to be chosen competitively in Washington; he also proposed > incentives for localities to try voucher plans, which let parents spend > public money at private schools. The idea in both cases was to stimulate > innovation by bypassing the entrenched establishment of public school > employees. > > On Capitol Hill, the voucher measure was demolished under ferocious > opposition from groups representing public school teachers and > administrators. Under pressure from the National School Boards Association > and others, the "break-the-mold" schools turned mostly into block grants > for state education agencies and local school districts: in other words, > more money for the existing system and its officials. > > Whichever way you feel about the Bush proposals, their fate is indicative. > "In the politics of education, what you have to recognize right from the > start is that the [public school] educational establishment has > tremendously more resources than anybody else," said Stanford University > political scientists Terry M. Moe, who advocates vouchers and other > reforms. "And that's not unique to education. You can't get anything past > these groups." > > If there is a single sad symptom of demosclerosis, however, it is bogus > national poverty. > > People often talk as though the country has become too poor to afford > federal initiatives. In fact, the United States is now wealthier than any > other country in human history, including its prior self. In 1990, real per > capita disposable income was twice as high as in 1960, when the federal > government could "afford" almost anything; real wealth per capita was 62 > per cent higher than in 1960 and real output was 80 per cent higher. "Poor" > is the one thing America is not. > > Is the government poor? It collects and spends more, in inflation-adjusted > dollars, than at any time in history, far more even than at the peak of > World War II. Its tax base, measured as a share of the economy, is at the > high end of the post-war norm, and above the level of the "wealthy" 1950s > and 1960s. > > If government is "poor," it is only because of its inability to reallocate > resources for new needs. In other words, government is not poor, it is > paralyzed. > > TRIAL AND ERROR > > *W*HAT is going on here? Why has government become so ossified and > immobile? > > In large, complex systems, the key to successful adaptation is the method > of trial and error. In the large, complex system of biological evolution, > species undergo mutations, the vast majority of which fail. A few, however, > succeed brilliantly, and those proliferate by out-competing the others. > That is how life adapts to changing environments. > > Similarly with a capitalist economy: The key to its adaptability is that > it makes many mistakes but corrects them quickly. Entrepreneurs open > businesses; many fail, but every so often someone hits on a brilliant > innovation. The more-successful strategies will proliferate by > out-competing the others. Capitalism adapts through trial and error. > > Similarly with science: It tries out countless hypotheses every day and > abandons most of them. The knowledge base adapts through trial and error. > > Government is another big, complex social system. The way for governments > to learn what works in a changing world is to try various approaches and > quickly abandon or adjust the failures: trial and error. However, something > has gone badly wrong. > > For fiscal 1993 alone, the Bush Administration proposed ending 246 federal > programs and 4,192 federal projects. How many of those will die? > Approximately none. The Reagan Administration made a fetish of trying to > eliminate federal programs. Despite President Reagan's high popularity and > his effective control of Congress in 1981-82, during his eight years in > office a grand total of two major programs -- general revenue sharing and > urban development action grants -- actually got killed. (See NJ, 3/28/92, > p. 755.) > > One reason is that people disagree about which programs failed, and even > about what "failing" means. Another reason is that as soon as a program is > set up, the people who depend on it -- both the direct beneficiaries and > the program's employees and administrators -- organize to defend it > ferociously. These groups are, of course, none other than Olson's > "distributional coalitions" -- what others have for years described as part > of an "iron triangle." They have money, votes and passion. They can be > defied, but only at serious political risk. > > In the period beginning with the New Deal and peaking with President > Johnson's Great Society, Washington seemed one of society's most adaptive > and progressive forces -- which, at the time, it was. What Franklin D. > Roosevelt's and LBJ's visionary policy makers did not foresee was that > every program generates an entrenched lobby that never goes away. The > result is that virtually every program last forever. > > And so, although no one disputes that the Rural Electrification > Administration has largely fulfilled its New Deal mission of bringing power > and telephones to rural America, the program keeps right on going. The > rural electric cooperatives' 65,000 employees and 10,000 local directors > vigorously defend it, with the help of their interest group, the National > Rural Electric Cooperative Association, whose budget for programs and > administration runs to $ 11 million a year. > > In 1955, Congress set up a program to subsidize the production of wool, > which in those days was a vital military commodity. Along came synthetics, > which by 1960 knocked wool off the Pentagon's strategic commodities list. > But in 1992, more than three decades later, the wool program will spend $ > 180 million. It is ably defended by the small but devoted group of people > who benefit from it, in some cases richly (in 1989, more than 60 farmers > got subsidy checks for more than $ 100,000). (See NJ, 5/18/91, p. 1168.) > > Not only are policies hard to kill, they are also hard to change. Every > wrinkle in the law produces a winner who will resist reform. that is why > the United States operates under an anachronistic banking law from the > early 20th century. Years ago, scholars understood that some provisions of > the program of aid to families with dependent children, a mainstay of the > welfare system, encourage fathers to leave home. Yet key corrections have > still not been made. (See NJ, 6/20/92, p. 1454.) > > And so programs are impossible to kill and very difficult to correct. The > implications of this are profound. > > Imagine an economy in which every important business enterprise is kept > alive by an interest group with political clout. Over time, the world would > change, but the businesses wouldn't. Obsolescent companies would gobble up > resources, crowding out new companies. The economy would cease to adapt. > > That is what happened to the Soviet economy. Which imploded. > > In principle, the U.S. government's situation is like the Soviet > economy's. In both, the method of trial and error has collapsed. > > In Washington, every program is quasi-permanent, every mistake is written > into a law that some vested interest will defend furiously. The result is > that as the old clutter accumulates, government cannot adapt. > > First, old programs and policies cannot be gotten rid of, and yet continue > to suck up money and energy. And so there is little money or energy for new > programs and policies. The old crowds out the new. > > Second, and at least as important: When every program is permanent, the > price of failure becomes extravagant. The key to experimenting successfully > is knowing that you can correct your mistakes and try again. But what if > you are stuck with your mistakes forever, or at least for decades? Then > experimentation becomes extremely risky. > > Everyone agrees that the nation's current health care system makes no > sense. Yet any reform will produce vested winners (hospitals? doctors? drug > companies? left-handed dentists?) who will fight further change. A > Canadian-style system or a voucher system, once adopted, would be hard to > adjust and almost impossible to get rid of. Policy makers, fearful of > making a mess they cannot clean up, become rightly reluctant to innovate. > > Underlying the breakdown of the method of trial and error is an ironic > cycle, based on the fact that every new program creates a permanent > interest group. The same programs that made government a progressive force > from the 1930s through the 1960s also created swarms of dependent special > interests whose defensive lobbying made government rigid and brittle in the > 1990s. In effect, the rise of government activism immobilized activist > government. Yesterday's innovations became today's prisons. > > No one starting anew today would think to subsidize wool farmers, banish > banks from the mutual fund business, forbid United Parcel Service to > deliver letters, grant massive tax breaks for borrowing. Countless policies > are on the books not because they make sense in 1992, but merely because > they cannot be gotten rid of. They are dinosaurs that will not die. In a > Darwinian sense, the universe of federal policies is ceasing to evolve. > > HAPPY ENDING? > > "*M*AYBE the message is: Cheer up, things are getting worse," Olson said. > > In person, Olson is more optimistic than his theory. Ten years ago, he > ended his book with a sentence carefully crafted to leave room for > optimism. Is it reasonable to expect, he wondered, that awareness of the > damage done by special interests "will spread to larger and larger > proportions of the population? And that this wider awareness will greatly > limit the losses from special interests? That is what I expect, at least > when I am searching for a happy ending." > > He is still searching for that happy ending, and he reports being > optimistic three days out of five. If the public becomes angry enough, > politicians may risk the wrath of the special interests. Thus, if things > get worse, action might be taken. > > "We do see growing recognition of the problem," he said, "and history does > show examples of thoroughgoing reform." Mexico, for instance, which has > long been hogtied by cozy deals between special interests and the ruling > party, is opening its economy. Even the obstinate government of India is > opening up. In America, the 1986 Tax Reform Act demonstrated that an > anti-special-interest package can succeed if the political leadership > pushes hard enough and the payoff is big enough. > > However, hope can be matched stride for stride by doubt. Tax reform was > remarkable precisely because it was so rare and so difficult, and the > steady accumulation of interest groups implies that such reform will become > harder, not easier. Moreover, India, Mexico and, for that matter, the old > Soviet Union turned to reform only after approaching, or actually crossing, > the brink of calamity, a fact that gives little comfort. > > Short of calamity, suppose American voters do get angry. So what? > Generalized voter anger against "the system" does not translate into votes > against particular programs or groups; no one gets reelected to Congress > for voting against maritime subsidies or wool farmers. "In Congress, we > don't get to vote on the Minn., told Time magazine in June. "We have to > vote for or against actual programs." > > What about reforms of the political process? Limits on politicans' terms > and on campaign contributions, for example? Process reforms might make some > difference, but probably not much. In a free society, groups will always > find ways to defend their interests, as is their right. > > At intervals, windows may open for reform. If the 1992 elections shake up > both Congress and the White House, 1993 might provide such a window. > However, the processes that Olson described are fundamental. They are in > the system, not the people; new politicians will face the same pressures > that their predecessors faced. Weber implied as much when he told Time, "I > don't know what comes next after we have this tremendous cleaning-out > election and then the Congress gets together next year and people find we > still are not going to reduce the deficit, we still are not going to reform > health care." > > Weber added: "I'm not by nature a pessimist. I like to think that our > system works and is going to right itself. But I see it decaying." > > In any case, reforms' effects are likely to be temporary. Special-interest > groups will always tend to accumulate over time; if shaken off, they will > re-accumulate. "The termites are always there," Olson said, "The clock > keeps ticking." > > If government tends to calcify, this does not necessarily mean the country > will also calcify. It depends on how other institutions compensate. > Corporations, for instance, are delivering education that the public > schools are not. > > Nor does calcification mean that the federal government is, or will be, > wholly unable to pass laws, adopt policies and expand programs. It means, > rather, that new reforms and policies and programs will tend to be piled on > top of old ones, so that the whole accumulated mass becomes steadily less > rational and less flexible -- as though you had to build every new house on > top of its predecessor. > > What demosclerosis means for conservatives is that there is no significant > hope of scraping away outmoded or unneeded or counterproductive liberal > policies, because nothing old can be jettisoned. What it means for liberals > is that there is no significant hope of using government as a progressive > tool, because the method of trial and error has broken down. > > For Washington and for the broad public, demosclerosis quite possibly > means that the federal government is rusting solid and, in the medium and > long term, nothing can be done about it. The disease of democratic > government is not heart failure but hardening of the arteries. > -- -- Centroids: The Center of the Radical Centrist Community <[email protected]> Google Group: http://groups.google.com/group/RadicalCentrism Radical Centrism website and blog: http://RadicalCentrism.org --- You received this message because you are subscribed to the Google Groups "Centroids: The Center of the Radical Centrist Community" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. For more options, visit https://groups.google.com/d/optout.
