We Americans are in a pickle. We are owners of a losing national team. Yet we cannot seem to replace our coaches. Why is this? What should we do about it?
Let us look a bit at enterprises that do change their coaches when they lose too many games: baseball teams. Baseball teams are franchises or businesses. A team’s organization structure is simple and efficient. The teams have owners, who pay many millions for the franchise ($400—$600 million is in the ballpark). They have a direct interest in making money by selling tickets to games and by selling broadcast rights and advertising. In this quest, the owners hire and fire employees. These include the general business managers who in turn hire and fire the team’s managers, also known as coaches.
The teams are grouped into two leagues, called American and National. The National League began in 1876 and the American League in 1901, replacing earlier organizations. Maybe not so coincidentally, these years also begin the modern political era, marked by a huge expansion of American national government. Politically, the terms American and National are now virtually fused into one.
The baseball owners keep track of and quickly penalize under-performance in baseball. They have a great deal to lose if they don’t. Out of 30 major league teams, 8 had new managers in 2006. So far in 2007, there are 7 replacements. Despite the incessant carping of critical baseball fans, the teams show signs of being run efficiently. Look at how they seek taxpayer subsidies for stadiums. Anyone who seriously thinks he can run a baseball shop better can find a triple-A franchise for sale at a modest price of $1—$20 million.
The federal or national government is our own American-National league all in one. We the American voters are the owners, or so we like to imagine. We deal with multiple coaches, known as Representatives, Senators, Presidents, federal judges, etc. In reality, the coaches and their hosts of bureaucrats boss us "owners" around.
The nation has one major political team, not 30, and that team is our national government. There are also 50 minor league teams called states, and some other divisions such as the District of Columbia. These operate independently to some extent. Some are very large indeed, and they boss us around too; but all are increasingly tied into and dominated by the sole national team.
Instead of one owner who has a clear idea of what he is after and whether or not he is getting it from his team, we have 100 million voting-owners who have a wide range of different ideas of what they are after and who do not know whether or not they are getting it from their team and have little or no incentive to find out. There are no scorecards that count games won or tickets sold. Instead the coaches dabble in a huge range of taxes, subsidies, laws, programs, and regulations. Most owner-voters never bother to decipher the performance of their coaches, because they can’t hire and fire coaches except by secret balloting in which their vote counts for nothing; and that is because their vote is mixed in with the votes of the other 99,999,999 voters. Furthermore, since there are multiple coaches (in Congress, the Executive, and the Judiciary) jointly playing multiple games, there is no way to figure out what one coach is responsible for anyway.
Some conscientious people, who are trying to make democracy work, examine voting records and create scores; but the relation of these scores to our pocketbooks and happiness is more than tenuous. Most of us ignore these efforts.
Is this any way to run a country? There are hundreds of local franchises for all sorts of sports teams. There are millions of local businesses with clear goals, clear accounting, and clear lines of responsibility. There are thousands of local governments for those who insist that government is necessary. Why do we need national government at all? Why do we even need state governments? It takes no genius of a management consultant to see that these organizations are set up in a ludicrously inefficient fashion. From the viewpoint of us the people, which is what matters here, these governments have no clear goals, no clear accounting, and no clear lines of responsibility.
The constitutions that serve to legitimize these governments provide only the most vague and open-ended goals. There are no measures of performance, and the voting setup guarantees that no one is responsible for the outcomes. These constitutions do little more than provide a warrant for forms of government that pacify our fears. In the name of (and only the name of) freedom, our governments have no apparent dictators, no apparent monarchs, no apparent oligarchies, no apparent chairmen of central committees, and no apparent number-one tyrants. Instead we have representatives, senators, governors, presidents, judges, and supreme courts. Yet we still have out-of-control governments. We are still told what to do and how much to pay.
In actuality, matters are even worse than this. Voters choose a set of national coaches from pre-arranged lists of candidates. These lists come from two major leagues, the Democratic Party and the Republican Party, who alternate running the national team. In other words, the team through its nominating process tells us what coaches we may select. Some of us, who participate in party politics, have the illusion that our nominating votes, and not the manipulations of party bigwigs, control the ultimate candidates. Most of us, the supposed owners, then discover that our choices are limited to those players who support the team’s policies, no matter whether they are good or bad for us.
The U.S. Constitution says nothing about these parties. The Constitution is a document that created a national government and whose language laid the foundations for a very strong national government. Yet it also made some concessions to the idea that the national government was a creation of the states. In particular, it says that the states shall select electors who will choose the President and Vice-President. Each state can do this in its own way, by its own laws. The state legislatures could, if they wished, select presidential electors, bypass the popular vote, and choose a president to their liking. Instead, the legislatures are also controlled by the two major parties.
The actual procedures chosen by the state legislatures typically have the parties presenting voters with slates of electors and the popular vote determining which slate gets to vote for the president. In effect, the state legislatures do not choose the president; and the people do not choose the president even indirectly by voting for state legislators. Rather, the people vote directly, which makes them think they have control; but their choice is, practically speaking, limited to candidates selected by the two major parties. Having captured the state legislatures, the two parties are running the show.
Since the two parties run the national team, we the owners are merely asked to sign a check already made out in amounts we cannot control to one of two candidates that we do not select. This is a process not greatly removed from voting for a leader in a one-party system.
The long and short of it is that the team runs us. We do not run the team. This is why, despite the unpopularity of the current president and the current war, and despite the mid-term election results, the head coach remains in office and continues running up losing scores with the national team.
The solution to these national problems is not to fire the existing coaches. The two parties will merely find new faces and bodies to replace the old. The national team will continue to lose games. We the owners who are footing the bills will continue to run losses. The solution is to liquidate the losing enterprise, the national government. The two parties will lose the grand national piggy bank that they now control. They never should have had it in the first place. Their sorry records in office tell us clearly that they do not deserve such power. Ending the national government is the simplest way to fire this losing Democratic-Republican team.
This will still leave us with 50 state teams (plus some other entities) and with thousands of county, parish, and local governments. Some of these state governments are huge and surely can be further broken up into smaller pieces. These units are enough to handle whatever social problems we currently deem necessary for government to handle. Before the rise of the national team, Americans successfully dealt with all sorts of issues in this decentralized mode. Unfortunately, we planted the U.S. Constitution in our midst; and it legally nurtured the monopoly national team of today.
In time, if we decentralize, we may even discover that we can live without the state governments in their current bloated configurations. The states too, we will discover, are owned and operated by the two major parties. We may see ways to handle ever more of our affairs ever more efficiently through free markets. We may discover and re-discover the virtues of freedom and free markets. We may see ways to realize the American ideals of life, liberty, and the pursuit of happiness.
Michael S. Rozeff [send him mail] is a retired Professor of Finance living in East Amherst, New York.