What Parkinson's Law Says About Federal Spending
by John Tamny
by John Tamny: Bernanke
Meets His Inept Match in Bill Dudley
expands so as to fill the time available for its completion."
~ C. Northcote Parkinson, Parkinson's Law, p. 2
national elections showed that voters are increasingly wise to the
basic truth that governments can only spend what's been taken from
them first. From that there's developed a growing consensus inside
the electorate that Washington must mend its profligate ways.
As a result,
politicians on both sides of the aisle, at least for now, are paying
lip service to the idea of reining in Leviathan. What's unfortunate
about their spending rhetoric is the seemingly bipartisan view within
the political class that since spending cuts will be "painful,"
they will require politicians to make a lot of "difficult"
decisions. This line of thinking is very much overdone.
Law makes plain that there's little relationship between the
size of bureaucracies and actual work accomplished. What this tells
us immediately is that whatever the good or bad of government services,
they could be delivered with a great deal less in the way of people.
the application of C.
Northcote Parkinson's theories to government spending, the Founding
Fathers clearly intended that the Constitution should restrain the
size and scope of government. A simple application of constitutional
limits to government activities could easily achieve what Parkinson's
theories may not.
solution that classical economic theory says might be the worst
of all of them would be some form of "balanced budget amendment."
This should be avoided at all costs because it would legitimize
excessive levels of spending that reduce the growth of the private
answer to the fiscal problems of the U.S. government is decidedly
not tax increases or a balanced budget; rather it's reduced spending
across the board. Anything else ensures a continuance of our large
and overbearing federal government.
Law. While analyzing British naval history, author and scholar
C. Northcote Parkinson revealed as false the widely held view embraced
by politicians and taxpayers that the need for more civil servants
will reveal itself through a growing volume of work completed. The
truth is something quite different.
observed, "the number of the officials and the quantity of
the work are not related to each other at all." In his case,
Parkinson witnessed the non-relationship up close through studies
of the Royal Navy's bureaucracy.
While the Royal
Navy could in 1914 claim 146,000 officers and men served by 3,249
dockyard officials and clerks, plus 57,000 dockyard workmen, by
1928 there were only 100,000 officers and men, yet the number of
dockyard officials and clerks had risen to 4,558. This, despite
the fact that the number of British warships had declined from 62
on to point that over the same period, the number of Admiralty officials
had risen from 2,000 to 3,569. The British Navy had shrunk by 1/3rd
in terms of men, and 2/3rds in terms of ships, thus forcing Parkinson
to conclude that the growth in the number of workers for the Royal
Navy "was unrelated to any possible increase in their work."
on to lay out what he deemed two "motive forces" for the
increase of bureaucracy alongside reduced work output. As he put
it, "An official wants to multiply subordinates, not rivals,"
and secondly, "Officials make work for each other." If
an official feels overworked, whether true or not, there's little
incentive to hire someone of similar stature, nor is there incentive
to hire just one subordinate. Indeed, if the senior official were
simply to hire one subordinate, doing so would effectively make
the hire similar in stature to the individual who hired him.
incentive is to hire two subordinates, separate the work assigned
to each, and in doing so, make both hires less worthy of becoming
rivals of the senior official. Then, if either of the subordinates
becomes overworked, the same incentives apply on the way to many
employees doing the work previously handled by just one person.
the myriad bureaucracies which dot the Washington, D.C. landscape,
it then becomes apparent why our government costs more and more
while achieving less and less. Government is not only intrusive
today, but also very expensive thanks to bureaucratic incentives
not driven by the profit motive to grow.
of Triviality. Worse for taxpayers, Parkinson also asserts a
Law of Triviality, according to which "the time spent on any
item of the agenda will be in inverse proportion to the sum involved."
It implies that the political act of reducing expenditures is the
most difficult of them all.
insight to politicians, they will sweat the small things they understand
(this today is animated by abudant rhetoric about "earmarks",
but very little talk of reducing the big-ticket programs that actually
matter), while spending little time on the large items. Parkinson
explained this through the prism of a multi-million dollar expenditure
for an atomic reactor that is voted on without much thought, versus
a great deal of discussion concerning smaller, easier to understand
line items such as annual spending on coffee for the government's
can grow with great speed because all the incentives of employees
not policed by investors tilt towards growth. The process is enabled
by a political class that can't possibly understand the activities
of so many workers, some of whom live in their districts. The result
is then unsurprising, as politicians vote for large expenditures
with little regard to their merit.
To fix this,
it is illogical for Congress and the President to go to the effort
of understanding just what each federal department does on the way
to surgical cuts. Better it would be to acknowledge Parkinson's
point that there's very little correlation between employees and
work output. Congress should skip surgical spending cuts in favor
of across-the-board reductions that would hit every Washington function
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