The growth of government is associated with a wide range of adverse economic consequences; this statement is one that wouldn’t be denied by any blogger on this site.
However, I think it is reasonable to also claim that the growth of government can lead to a host of damaging social and political consequences. Some facets of these which spring to mind are: the weakening of emergent social arrangements within civil society, such as families and charities, and of their authority; the dilution of self-reliance as people come to perceive the government, and not business, as the primary organisational vehicle for fostering improvements; and the distortion of democratic politics toward becoming a frenzied contest concerning who can deliver the most short-term favours to prized constituencies, regardless of economic or fiscal implications, rather than a sober discussion as to how best to keep protecting individual freedoms in light of changing circumstances.
In a recent piece by Reason.com science writer Ronald Bailey, extracted by the Wall Street Journal in its must-read daily “Notable and Quotable” feature, another consequence of a growing public sector is identified. This relates to the growing preparedness of rent-seekers to embellish their claims for subsidies, or tax and regulatory favouritism, with hyped-up retorical spin thus economising or concealing the truthful underpinnings of their claims. Two examples in this regard include global warming alarmism and exaggerations of the extent of poverty in advanced economies (but there are many more).
Anyhow, here is the relevant extract which appears in the WSJ:
For decades, an increasingly large percentage of our economic output has been moved from the positive-sum game of markets and private property to the zero-sum game of government and politics. According to the Office of Management and Budget, total government spending in the U.S. rose from 17 percent of GDP in 1948 to 35 percent in 2010. As public choice theory predicts, the more resources government bureaucracies control, the more lobbyists, crony capitalists, and entitlement clients will appear seeking to divert handouts into their pockets. Such would-be beneficiaries need experts to construct the facts that they use to justify to political patrons and agency bureaucrats why they deserve a share of the government’s largesse. To the extent that we live in a “post-truth era,” it is in good measure because it pays so well to dissemble, exaggerate, and spin for government grants and favors.
One faint upside to this Julie is that from such a large number of spinning geniuses governments will be more likely to find the one that is able to write the press release plausibly explaining why they are no longer funding this or that climate change based rort.
Ooh Honey Honey
17 Feb 13 at 11:07 am
The world is suffering from a plague of government. It is a bad meme in our civilization.
Trouble is while a little bit of government may be a good thing, human beings operate on the pig principle “little bit good, more must be better”.
Government is like therapeutic drugs, a little may cure you, more may kill you or make you very sick.
Eyrie
17 Feb 13 at 11:11 am
The dissolution of traditional social arrangements is a feature of industrialization. To indoctrinate one’s self against this phenomena, for which there is ample evidence, is a little self-defeating. Likewise obstructive is the cherishing of an ideal of business as some kind of alternative to government.
People look to the government to provide solutions and, yes, have lost their self-reliance – as Jefferson said they would – they look to business to provide iPhones.
Pretending otherwise is folly.
Adrien
17 Feb 13 at 11:16 am
Fukuyama wrote a good book (The Great Disruption) on the decline of social capital – understood as a private, familial, subsidy-eschewing good – dating from about the mid-1960s. What started as a trend has now become an orthodoxy of Western political and social behaviour. In the US, I suspect many Americans don’t even comprehend the problem. It’s as though they see Uncle Sam himself as an exemplar of what America is all about. The fetishisation of ‘law enforcement’ – which has parallels with the lionisation of ‘G-Men’ in the Roosevelt era – is a disturbing manifestation of this. So is the contrived tax patriotism of the Democrat left – which sells state-provided free stuff as the essence of what America is all about.
In Australia, almost all examples of privately financed and managed social capital – from the McGrath Foundation to every sporting club in the land – end up being infected by ‘generous’ governments which ‘come to the party,’ munificently allotting money from the public purse to ‘help out’ with what private citizens are trying to achieve. The result is a more uniform, dull, compliant and – importantly – individually selfish and borish culture.
C.L.
17 Feb 13 at 11:28 am
Ain’t that the truth! Reminds me of something from Bible school days, Luke 18:8 “when the son of Man comes, will he find faith on the earth?” Replace faith with trust and that’s where we are getting to fast.
Biota
17 Feb 13 at 11:47 am
C.L.,
1. The lawmen should be respected. They should be professional and courteous, courageous and not be forced to enforce bad laws, and use their powers of discretion widely and with mercy. Peaceable citizens and law enforcement ought to be partners.
2. The social capital idea is so important, this is why I think the Catholic Church in Australia erred so badly in ever taking up the money from Menzies. How is “social justice” got anything to do with the faith? It was a trojan horse for the left wing politicisation of the church.
.
17 Feb 13 at 11:48 am
Presupposes that you know the optimal size of government. The composition of spending is important. More spending on law and order versus more pure waste.
Social insurance in Western Europe grew to stem the popularity of socialism and communism.
See Politics by Principle, Not Interest: Towards Nondiscriminatory Democracy with Roger Congleton
Buchanan at one time used to be all for inefficient tax systems because they do not raise as much revenue. Efficient taxes make it easier for government to extract excess revenue from the population with less resistance.
Buchanan moved to a generality norm as a constitutional principle: governments impose uniform regulation and use flat taxes on uniform tax bases to fund an equal-per-head demo-grant to replace all existing government transfers. That could lead to a very large government as a share of GDP.
To quote Politics by Principle, Not Interest: Towards Nondiscriminatory Democracy:
Jim Rose
17 Feb 13 at 11:50 am
“Likewise obstructive is the cherishing of an ideal of business as some kind of alternative to government.”
I’ll take free voluntary exchange of value for value over the “gimme your wallet or I’ll shoot you” modus operandi of government, Adrien.
Eyrie
17 Feb 13 at 11:52 am
Respect the ATF, DEA etc etc?
Speed camera commandos in military fatigues?
Sniffer dog cops assaulting pedestrians?
No.
They’re state gang-bangers who should go and get a real job.
As regards the Church, yes – I agree 100 percent.
Not publicised when she was canonised (have a guess why), St Mary Mackillop banned her congregations from receiving state money. The old dears who now comprise the dying remnant of her order wouldn’t be inclined to discuss this, of course – given that their comfortable ‘poverty’ is largely state-financed.
C.L.
17 Feb 13 at 11:57 am
What a joke!
.
17 Feb 13 at 12:04 pm
The fact that speed cameras do not instantly arrange the decapitation of the cretins who cannot drive to the limit is admittedly a sad flaw. The elimination of crazies who slightly endanger my life would be a good thing but is not currently feasible.
The use of dogs to savage the gonads of anyone who smells of dope has the dual benefits of reducing illegal drug use and providing entertainment at the dull rail stations.
Both are to be applauded.
Whalehunt Fun
17 Feb 13 at 12:21 pm
Well, I’m glad that you approve of the police state.
C.L.
17 Feb 13 at 12:30 pm
A German sociology prof Ulrich Beck wrote in the book Reflexive Modernization that global warming and climate change gave a reason for a switching of the rule systems governments live by. So the political class changed the rules based on theories created so that they would change the rules.
Now he was all for it calling it the Metamorphosis of the State but no one told most of us there was such a rule change. We are still thinking it’s politics as usual while others are trying to figure out precisely what is the tipping point where others can live off the productive sector of the economy. I did not say private as many of the large companies love the Metamorphosis as well as long as they know someone at the regulatory agency. Or their lobbyist does.
Robin
17 Feb 13 at 12:55 pm
Are you extracting the urine Whalehunt?
Infidel tiger
17 Feb 13 at 1:01 pm
The fact that you believe driving over speed limits set by the state is dangerous, is a sad flaw in your cognative ability.
jupes
17 Feb 13 at 1:27 pm
OK Whalehunt you got me.
jupes
17 Feb 13 at 1:28 pm
Thanks, all, for your interesting comments, even those I don’t necessarily agree with!
If I may, a couple of quick comments in response to Jim:
(a) no, Jim, I don’t presuppose an “optimal” size of government at which point I would settle. My strong inclination is that smaller government is always better than larger (happy to talk more about the implications of that some other time).
(b) yes, you’re right, Buchanan did shift his views from non-generality to generality. Like you, I’ve read both The Power to Tax (PT) and Politics by Principle (PP), and my tendency is to side with PT. In my opinion, PT provides useful explanatory and normative insights regarding how majoritarian democratic politics operates today.
As I mentioned in a comment to a previous post, the problem with PT in practical terms is that it would set up societies for an explosion in the size and scope of government.
Now, a paper in Constitutional Political Economy journal, by Niclas Beggren, some years ago does propose something of a work-around for this. Beggren couples Buchanan’s generality principle with strong constitutional limits on size/scope of public sector activity. To my way of thinking, this would imply extremely small demo-grants and very low-rate flat taxes.
Even so, I feel PT still trumps PP, but that might reflect little more than taste.
Julie Novak
17 Feb 13 at 1:30 pm
Presupposes that you know the optimal size of government.
I would say in Australia we should be aiming for around 16-17% of GDP. A reduction of around one-fifth in the size of our current government, that would still allow a reasonable welfare state to remain but would remove a lot of fluff. We can then see what happens to productivity and reassess.
But we don’t have to agree on the exact figure. Let’s just start moving in this direction and we can reassess as we go along.
John Mc
17 Feb 13 at 1:40 pm
Ramirez nails this in one picture. The guy is a genius.
As Menken said, nobody ever went broke underestimating the intelligence of the American public.
Fortunately the ALP hasn’t quite burnt through all the capital Costello built up in the Oz economy. Maybe there’ll be some left by the time of the election.
Bruce
17 Feb 13 at 1:49 pm
Really good post and really good comments.
Jc
17 Feb 13 at 2:05 pm
Onthe subject of corporate welfare, how about this load of tosh.
I wonder what tenuous links GMH has whacked into that $6B calculation (with generous multipliers of course) to fool that idiot pretending to be South Australia’s Premier, and the Australian Government it goes without saying, to justify not only extracting taxpayers’ hard earned for their business, but also to charge 20% plus more for the same car here as in the USA, even though it is made here!
I posted a comment on that article, including a statement about the need for journalists to act like journalists rather than stenographers who blindly accept whatever rubbish a rent seeker tells them, so I doubt it will be published.
entropy
17 Feb 13 at 2:48 pm
Sth Australia was poorly served by the benefits granted to Mobil, now Exxon for running a refinery in their state. You would think they would have been shy of handouts to local plants of multinationals, but it would seem not.
If that was not a lesson then the MRRT negotiations should have caused them to recignise that business drives a hard bargain, but no.
Anyway most of the cretins soon to be beheaded by the nextgen speed cameras are V8 hoons so commodore demand will be dropping of when Me and Bob Carr are joint rulers
Whalehunt Fun
17 Feb 13 at 3:53 pm
Sorry
… when Bob Carr and I are….
Whalehunt Fun
17 Feb 13 at 3:54 pm
I’ll take free voluntary exchange of value for value over the “gimme your wallet or I’ll shoot you” modus operandi of government, Adrien.
Well so would I Eyrie. And once upon a time in the days when fishing and nose jewelry made out of bone were the hi-tech industries you could do that. Government is a protection racket. Still people will say ‘Hail To The Chief’ and they don’t usually mean WR Hearst or Andrew Carnegie, Henry Ford or Bill Gates.
That’s called a political reality. And in the eight decades since Hitler came to power it’s a bit strange we can still carry on as if it didn’t exist.
But please. Don’t let me interrupt you. You were polishing your silver doctrine.
Adrien
17 Feb 13 at 5:45 pm
Another angle on the broader issue, based on commentary on Obama’ State of the Union address, here. No doubt Olson’s books give a much deeper coverage.
Mother Hubbard's Dog
19 Feb 13 at 11:04 am