The burden of government.

The Burden of Government

THROUGHOUT MOST of human history,governments have been able to extract between 25 and 50 per cent of the total economic production of their societies; so the scattered historical evidence suggests. This is partly because pre-modern economies were agricultural ones, in which whoever controlled or owned agricultural lands was by definition an economic czar; partly because it had not occurred to anyone to challenge these drastic economic exactions. About five hundred years ago, however, in parts of northern Europe, people began to question this state of affairs. Concepts of property and personal rights developed, as did the idea that government exists for the benefit of its citizens, instead of the reverse. The Industrial Revolution greatly accelerated the restraint of government, by creating large, dynamic population centers as counterweights to feudal power. In most industrialized countries, restraint of government was effectively achieved by the late nineteenth century.

This was certainly progress, but wasit lasting progress? The history of the past one hundred years demonstrates conclusively that it was not. In fact, Edwin S. Mills suggests, in The Burden of Government (Hoover Institution Press, Stanford University, Stanford, Calif. 94305-2323; $23.95), that this "century or two of government restraint was a mere historical aberration that existed while governments learned to control and to extract large surpluses from industrialized and monetized economies.' They have been greatly abetted, Mills argues, by the groth of democracy, with its vast expansion of the suffrage and its extension of education to the masses, as well as by technological advances in the production of commodities and services, and the dissemination and storage of information. In short: The cause of the enormous expansion of democratic governments over the past century is the increasing number of people with the money, the interest, the sophistication, and the power to make use of them for their own ends. Whereas, in the late 1800s, only a tiny minority of wealthy and powerful men could successfully lobby the U.S. Government, now everybody--cripples, blacks, Jews, and women, to echo the unfortunate James Watt--can do so. And has. And does.

The result is a political, bureaucratic,and fiscal leviathan incapable of exercising its appointed functions, assuming even that said functions were actually its primary concerns. In reality, government power and policy-making are ends in themselves. Of course, Mills concedes, "It is widely believed that those who oppose big government are sympathetic to large businesses and lack compassion for the poor.' However, "No such logical connection exists. Democratic governments promote the interests of large, well-organized, and well-financed groups. Large businesses qualify on all scores. . . . But now they have been joined by many other interest groups.' Mills's ultimate concerns here are: What should governments do? What do they do? And: Why do they do what they do? To which the answers seem to be: Not a whole heckuva lot. A helluva lot too much. And, Say, when were you born --yesterday?

After considering such matters asprevailing macro-economic theory, social efficiency and equity, federal and state regulatory policy and practice, and the deleterious effects of large paternalistic governments in undeveloped countries, Mills concludes that "at least half of domestic government spending in the United States must be understood in political terms and has nothing to do with economic efficiency or equity.' His recommendation, therefore, is that government domestic spending in this country be cut by at least 50 per cent. According to his estimates, reform of government transfer programs could reduce the cost of these by about 50 per cent, while at the same time increasing both efficiency and equity. Reductions of the same order could be made in transportation, agriculture, health, housing, energy, and education programs. Almost all housing programs, Mills says, should be abolished, as should the Departments of Energy and Education. He calls for the reprivatization of health care, and a drastic reduction in state- and localgovernment spending, entailing, among other things, the privatization of public institutions of higher education; at the elementary and secondary educational levels, he argues for the voucher system.

Big government as we suffer it todayhas been a century in the making. Consequently, it would be naive to expect its immediate dismantlement. Nevertheless, eventual reduction is a desirable goal, perhaps even a crucial one. Among the results would be: "greater competition, greater freedom of choice, reduced distortions from excessive regulation and excessive taxes, better matching of production to consumer tastes and needs, lower-cost production, and improve incentives to innovate.'