Tyranny of the Status Quo

by Michael S. Rozeff
by Michael S. Rozeff

In order to decrease the size of government and the State, it’s helpful to understand what makes them grow larger in the first place. Robert Higgs calls our attention to this important question in Crisis and Leviathan, in which he reviews the main explanations such as the impact of interest groups and focuses our attention on the roles of crises and ideology. I’ve stressed that over long periods of time people tend to follow out the fundamental rules of the game. If these allow gains through the State, then sooner or later, political entrepreneurs will discover and invent ways to capture such gains.

Here I consider a related process called the "tyranny of the status quo," which is a tendency for certain situations to stay the same, as they are, and not revert to what they were before. The present rules over the past and the future. We tend to stick and be stuck in our current rut.

Milton Friedman popularized this idea regarding the permanence of government programs. For example, once Medicare is enacted, getting rid of it is well-nigh impossible. It becomes accepted and part of the status quo. The tyranny of the status quo helps government grow.

While this is true, the status quo changes whenever any program, such as Medicare, is enacted. The tyranny of the status quo is not the whole story of why we have big government.

Existing conditions change, and so far in America they have usually changed in one direction since the Revolution. Governments tend to grow and States tend to gain power. This goes on until the system collapses through a revolution of some sort. At that point we need other models to describe why and when breakdowns occur and what happens thereafter.

This growth process is like that of the U.S. stock market. It too tends to stay at a given price level until it is perturbed. It too has a long-term upward trend with occasional overshooting and some backsliding every now and then. The stock market is fairly well-described statistically as a random walk with upward trend and some mean reversion. This means that in stock markets everywhere, today’s stock price is about as good a predictor as a naïve person can make of tomorrow’s stock price. This means that here too there is tyranny of the status quo. On a daily basis, the long-term upward trend is barely noticeable. But over time the trend, which helps provide a return to the investor, is noticeable and dominates. It is like the upward trend in government. In stock markets too, there are occasional revolutions. These are instances in which entire stock markets disappear, usually because entire economies break down.

Enter Robert Higgs and others who wonder how and why this growth of the State occurs. There are several complementary explanations that describe the how of the process, even if they do not always get at the why of it. This growth is difficult to explain in detail, but less difficult in general form. In this respect the problem resembles that of understanding the specific ups and downs of the stock market. Even after they have happened, no one ever knows why they happened although they pretend to. However, the long-term growth mirrors that of the underlying economy.

We can’t understand the stock market in detail because its total action aggregates billions or trillions of bits of information that no one is privy to. Similarly, the "macro" changes in our political system result from many individual "micro" decisions that we can never fully fathom. With due regard for the clan of conspiracy theorists who regularly regale me with the notion that there exists some group who for a hundred years has planned and plotted the political situation we are in with some aim in mind, which is either world government, barbarism, feudalism, or Armageddon (take your pick), I do believe that minds have been at work but in a far more complex mosaic of typically uncoordinated aims and actions than we or any historians will ever figure out. Some of what has happened we can understand, but there are inherent limits to the knowledge we can attain.

Despite the fact that individuals take action, we do not get the State that we deserve, even though it does in a way reflect individual acts and values. In Woody Allen’s hilarious comedy Take the Money and Run, he and five other convicts are chained together when they escape. We’re in similar straits, doing the best we can but locked together by majority rule, among other things. Our abilities to make our way are bounded and constrained in important political ways. Perhaps there is a conspiracy. Perhaps there is someone somewhere who is laughing at us.

One explanation (among several) of our Brobdingnagian State is that growth of government sometimes occurs via a ratchet effect. A big event happens, like World War I. The State assumes powers it didn’t have before the war. Afterwards, the status quo ante is never fully restored, even though the emergency, real, contrived, or imagined, is over. The new status quo is one of increased State power, perhaps with some reversion back to the previous situation. This rise and partial reversion is the ratchet effect.

This story fits some events, but for the continuing onslaught of laws from 1965 onwards it does not seem to apply. It’s hard to specify crises that brought about socialized medicine, environmental laws, civil rights laws and their various extensions, safety laws, education programs, or the recent prescription drug benefit law. Once they are in place though, the tyranny of the status quo takes over, and they don’t go away easily unless the government ignores them and their enforcement.

Pinpointing a shock like World War I or the Great Depression that creates the ratchet is easy. Understanding how the event maps into increased State power is where things get interesting and we know less.

It appears to me that the powers-that-be work the electorate’s psychology to make this happen. The details vary from case to case. The electorate is primed for acceptance by such elements as fear, desperation, and anxiety. A desperate and fearful people will be willing to adopt desperate solutions. People impatiently demand action and solutions. Sitting idly by while businesses liquidate excess inventories or labor moves to new locations takes time, and this will not do. People are suffering and something must be done! The enemy has struck and we must act!

Typically there is a lack of understanding and information about what is happening. Having not prepared for the deluge, many are surprised when it comes. The way is open for the State to step in, for propaganda to propagate, for anyone with an axe to grind to step in with solutions, be they press, intellectuals, politicians, or clergy. This is the time for a Townsend Plan or an NRA.

If prior education has led people to expect government action, this intensifies the demands. This is the time for specious arguments and bad analysis to be heard and take effect. If the government got us out of the last recession, let it do so again; even though the natural economic forces may have actually done the job and the government worsened and lengthened the recession.

Sometimes there has been a previous lengthy process of getting used to new ideas and ideology that now come to the fore. Sometimes old ideas can be tapped in order to facilitate the increase of State power. At these junctures, the rulers need only carry out a campaign. They can dominate the airwaves when they choose to. There is almost always a big rise in presidential popularity when the president makes a speech that starts the country on a war. It is possible that the mere fact that the president chooses to speak on any topic is enough to sway opinion his way, regardless of the content of the speech. There may be a "rally-behind-the-flag" effect. Just as Robert Green Ingersoll and other Republicans blamed Democrats for the War of Northern Aggression by "waving the bloody shirt," any president with a modicum of skill can find enemies to pillory and proposals to justify.

These same methods can work even when there is no big shock or crisis. As long as the rulers instigate a campaign for change, no matter whether a crisis has occurred or not, the change can be put over if they know how to involve the electorate and downplay the costs of the change.

Furthermore, the campaign to gain acceptance can even occur after a law or program has been instituted. Government growth need not be contingent on a crisis, even though crises are important when they occur. The key factor is the bag of clever techniques by which the powers-that-be cultivate acceptance of changes among voters.

What I am describing can be called the "up-for-grabs" hypothesis. The idea is that an important part of the citizenry or subjects have indeterminate or fuzzy preferences. This means that they have not made up their minds. The rulers help make it up for them. They lead the electorate to accept a new situation by psychological and informational elements in a campaign that is designed to turn minds and emotions in a certain direction.

For example, before a war and a pro-war campaign begin, the citizens can possibly swing either way, toward an anti-war or a pro-war position, say. To get them to support the war, some sort of participation is the psychological key. The rulers try to get the citizens to participate in actions related to the war in order to shift them to the pro-war state of mind. A vast range of actions will do: watch a speech, converse about the situation, hate or fear an enemy, buy a decal, watch a parade, watch talk shows, plant a victory garden, get a ration card, register at the local draft board, listen to a patriotic sermon, hear a song, view film of the enemy’s attacks. The goal is to get vague possible preferences to crystallize, presumably in the pro-war direction. The people’s interactions with their rulers, the campaign, and other events change their preferences from a fuzzy set of possibilities to a particular stance on the war. After that, their future choices depend on their newly-actuated pro-war preferences.

After this process of buy-in, the tyranny of the status quo takes over. People will tend to affirm the new status quo of war. Over the longer term, since parents tend to pass on their political preferences to their children, this too will tend to uphold the status quo.

For example, we have seen that libertarians have split over the Iraq War. Before that event and the attendant leadership campaign to justify it, libertarians were seemingly united against such aggression. However, opinions were really up-for-grabs. Some actually had fuzzy preferences or preferences in suspension or in a state of hesitation. After some events transpired, they settled upon a pro-war stance. Now there is a group of self-proclaimed pro-war libertarians or neolibertarians, and the odds are that they will not easily go back to their prior beliefs. The rulers succeeded in splitting libertarians.

By the same token, there are previous war-supporters of various political persuasions who have fallen away from war support because of what they have read on LRC, so that LRC has succeeded in splitting off some other party members or independents. Now they will tend to stay anti-war.

Those anti-war people, libertarians and others, who have steadfastly remained anti-war, were and are immune to the items mentioned above such as fear, desperation, propaganda, leadership appeals, and opinions of pro-war intellectuals, etc. Their preferences were clear and firmly held at the outset, and they remained stable over the course of events. They may even have strengthened further.

After a crisis has passed or a new law has been established without a crisis, the tyranny of the status quo takes over. There is no going back to the old social and political system. The rulers count on this happening.

Understanding the reasons for this social inertia is harder. Why don’t we go back to the status quo ante? Why is there a tyranny of the status quo? There are several explanations that work together.

The main explanation of the tyranny of the status quo is "status quo bias." The rulers create "events" that affect voter preferences. Once these events happen, the status quo bias sets in and voters support the war.

Status quo bias is a cluster of decision-making behaviors that have been measured experimentally and observed in practice by researchers in behavioral economics and finance. For example, people randomly given coffee mugs are more reluctant to sell them than people randomly given money are to buy coffee mugs. The ownership of the mug itself changes their preferences in favor of the mug.

All a leader has to do is "endow" citizens with the war, instead of a mug. Once they take "ownership" of it, they will be reluctant to give it up. It’s that easy.

"Owning" a war is a psychological event. The creative warmonger will invent ways to make people feel that they own the war, that they are like stockholders in the war, that they are getting a return on their ownership, or that they are getting benefits from it. Some day a leader will provide rosy annual reports of the war, if that will help give ownership. Whoever manufactured those ribbons or car decals did more than make a profit; they reinforced ownership in the war.

There is no end to the devices one can use to create ownership in the war, and they are the same as those used to move the people who are up-for-grabs: songs, parades, flags, photos of the military, speeches, patriotic symbols, reports of progress, hate campaigns against the enemy, reports of enemy atrocities, reminders of the enemy’s evil designs, associations of the enemy with prior villains, etc. These negatives about the enemy work because removal of the enemy then promises the war stockholder’s return.

In parallel with the emphasis on owning a war that provides positive returns, it behooves the rulers, as Higgs stresses, to conceal, downplay, and underestimate the war’s costs. Whatever costs there are will be labeled as noble events and sacrifices, attended by heroism and medals. They will almost be turned into benefits. The dead and maimed have earned a just reward in the hereafter and honor in the here-and-now, it will be said.

Downplaying costs can be a two-edged sword. If the war is sold as easy to win and casualties mount up or the war drags on, disillusionment can set in. Then the selling campaign has to be refurbished. At this point, new benefits of the war can be invoked. This is why war goals seem to change as the war proceeds. If the threat is gone, then a new threat appears, or perhaps the goal shifts to installing a new democracy. The war is reinvented.

Aversion to loss is another very well-known psychological factor that contributes to status quo bias. Loss aversion is a well-documented tendency for individuals to value losses at higher amounts than gains. It might take a possible $500 gain to overcome a possible $200 loss. Whatever the current situation is, say we are at war, then many people will not be willing to give up their ownership of it unless the prospective gain far exceeds the loss. For example, if they fear civil war in Iraq from withdrawing, then they have to be shown a much greater gain to overcome that fear. If, for example, American deaths were twice as large, then the gain of ending these deaths might be enough to change some views toward withdrawal. But because the gains have to exceed the losses by a substantial factor, loss aversion creates a bias in favor of the status quo.

In a democracy such as ours, there are strongly pro-war and strongly anti-war individuals who tend to cancel each other out. The question of support for what the rulers want to do will be decided by those in the middle. According to the up-for-grabs and status quo bias hypotheses, if these voters in the middle either have no strong preferences or preferences that can be swayed easily by psychological gimmicks, then it is easy for the rulers to get their way.

This is where the importance of ideology, stressed by Higgs, comes in. In the nineteenth century, the electorate may have held more strongly to the ideology that prevailed at the country’s birth. Their minds were neither up for grabs nor as easy to sway as today. The rulers could not get their way as easily, although some may have wanted to. Rulers also tended to be more greatly in the grip of the founding ideology or were elected as reflections of the voters’ beliefs.

In the twentieth century, after well over one hundred years of public school indoctrination and inculcation of socialist and other anti-American philosophies in colleges and universities, the original revolutionary ideology has been dimmed, lost, and/or replaced by new ideology. Now the middle-of-the-road voter lacks the firm anchors of understanding and belief that paleolibertarians still hang on to. In this respect, the minds of many critical swing voters are become as those of "children," easier to control and sway than 100 years ago.

Rulers do not actually require a change in ideology in order to get their way in a democracy and gain power. They can succeed in dominating the nation if enough of the electorate is made bereft of ideology, simply mute or dumb on critical issues. To help rulers succeed, public education needs only to remove minds from exposure to our culture’s founding ideas or present enough competing ideas so as to leave children confused and turned off of all ideology. Then the rulers can write their wills upon the tabulae rasae at opportune times.

January 3, 2006

Michael S. Rozeff [send him mail] is the Louis M. Jacobs Professor of Finance at University at Buffalo.

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