Llewellyn H. Rockwell, Jr.
language is designed to fool the public and enhance the power of
the state. Now, under Clinton, we have Orwellian economics. Government
spending is "investment," higher taxes are "growth," and central
planning is "collective entrepreneurialism." Unfortunately, many
otherwise savvy people have been fooled by this language into mistaking
social democrats for free marketeers.
Osborne, the author of Reinventing
Government, is the guru of this process. Our "fundamental
problem," he says, is "not too much government," but "the wrong
kind of government," bureaucratic rather than "entrepreneurial."
the market, the entrepreneur is the risk-bearing innovator who seeks
to satisfy future consumer demand and profits or loses by
the accuracy of his predictions. But this can have nothing to do
with the risk transferring institution called government,
which gets its money, regardless of consumer satisfaction, through
to Osborne, not only can government be entrepreneurial, federal
employees will then be public spirited and productive. Welcome,
in other words, to cloud cuckoo land.
cannot, by its very nature, be anything but bureaucratic, as Max
Weber and Ludwig von Mises have shown. Government gets its money
not in the market, but from unwilling "consumers." It has no profit
and loss test, and therefore can do no cost accounting. In the private
sector, it is cost accounting that enables a firm to decide which
projects are profitable and which are not, and to make decisions
on that basis. With this simple test, new technologies are developed,
resources properly allocated, and the world fed.
more decentralized the government is, the more flexible it is. It
is not surprising, then, that most of the examples Osborne gives
of good government are at the local level, where citizens have some
influence over bureaucrats. But Osborne wants to extend his local
examples to a national scale, pretending he can glean a model for
the largest and most complex economy in the world from city hall.
But when the government is giant and distant, when it spends $I.
5 trillion a year, and when its victims are diffused throughout
the en- tire population, it is impossible to make it imitate a locality.
the Clothespin Safety Administration gets $1 million this fiscal
year, but only spends $750,000. The budget director then cuts the
budget, which creates incentives for the agency to spend to the
condemns this as old-style government. His suggestion is to increase
the budget when the agency spends less than its appropriation, but
he overlooks the fact that this causes people to be even less concerned
about costs. And it does not solve the central problem: how do we
know how much the Clothespin Safety Administration should get in
the first place? It has no consumers and no means of determining
profit and loss, so it must be ruled arbitrarily.
a managerial standpoint, government is much like a closed-off maze.
We can make the players run a different path. We can give them new
maps. We can tell them to be creative and entrepreneurial. But in
the end, they are only running around a maze.
cannot be "reinvented" because its essential nature cannot be changed.
Though it may be necessary, it is always coercive, bureaucratic,
and wasteful. These vices are limited when government is limited,
but when it expands beyond enforcing contracts and keeping the peace,
it becomes destructive of society on a wide scale.
the defenders of the mixed-economy, Osborne's maze can be useful,
however. He provides a list of words they should stop using, including
rules, sanctions, regulation, licensing, grants, subsidies, and
loan guarantees. These are part of the "old order."
then offers phrases for the new Clintonian order, including: public-private
partnerships, quasi-public corporations, public enterprise, rewards,
technical assistance, volunteers, catalyzing non-governmental efforts,
and convening nongovernmental leaders.
can play this game. String these words together almost at random
and you're reinventing government. Say some welfare program is supposed
to help poor people, but actually encourages single crack mothers
to have kids who grow up to terrorize the neighborhood, all at taxpayers'
expense. Should the program be abolished? No, that is the old way.
the new way, we convene nongovernment leaders and volunteers to
give technical assistance to public-private partnerships for public
enterprises. Nothing changes, of course, except the cost to taxpayers
goes up, even as they are tricked into thinking that reforms are
Osborne wants the public and private sectors to be more "cooperative"
with each other. That is, the government should fund more special
interests. But when public money pours into the private economy,
it has a dis-coordinating effect, sustaining businesses that should
shut down, and generating unfair competition against those who stand
on their own feet.
Osborne pretends this is his idea, the history of big government
is the history of corporate elites getting rich at taxpayer expense.
That was true of 19th century railroad rackets, the Progressive
Era, the New Deal, the Fair Deal, the New Frontier, the Great Society,
and every war in our history. Making favored private interests wealthy
is hardly a guide to proper public policy.
one time, when private parties got rich off government, it was called
graft. Now it is called partnership. But this partnership can be
dangerous, as when Osborne advocates making taxpayers foot the bill
for private school. This means government control, and, for example,
he wants to forbid private schools 'from charging tuition beyond
the voucher" and to mandate "racial balance."
calls his program an "American perestroika." It's an appropriate
name, for the original perestroika was Mikhail Gorbachev's attempt
to save Soviet socialism. Gorbachev thought he could make it unbureaucratic
and efficient. He wanted to reinvent it, so to speak.
other Clintonians, Osborne is a social democrat, meaning he wants
to achieve collectivist goals through market incentives. But there
is an essential conflict between state and market. The mixed economy
can never be stable. Every intervention has some negative consequence,
which creates a demand for other interventions. That is why the
mixed economy always tends toward all-out socialization. Therefore,
compromising with the social democrats and their reinvented government
is supping with the Devil.