The best riposte to Bill Kristol comes from Hayek. He pointed out years ago–sorry, don’t have time to track down the citation–that the idea of small government was vital even if there was no prospect of its ever being achieved. So powerful and varied was the pressure in and on government for every kind of new spending that an automatic barrier was necessary to prevent the fiscal river sweeping all before it. A general prejudice against higher spending and taxes served as such a barrier. It might not prevent all or even most spending, but it would stop some. It would compel the government to think through its spending priorities and to confine them all within or nearly within taxable capacity. And though the government would probably grow anyway, it might grow less because of the prejudice that it should not grow at all.
If we were lucky, a barrier might even gain a quasi religious status over time, as the Gold Standard did in England until the first world war, and instill in voters the fear that tampering with it would be an impious act or even simply impossible. This worked for quite a while. When the Tories floated the pound in 1931, a former Labour minister, Lord Passfield (aka Sidney of Sidney and Beatrice Webb) said: "They never told us we could do that."
That is from John O’Sullivan. The question is whether the worrying paragraph undoes the goodness of the good paragraph. England, of course, would have done better to go off the gold standard much earlier than it did, or if it had not revalued the pound at an artificially high rate after the first World War.
I think this might be a good time to dust off your reading notes on Michael Oakeshott, Hayek’s friend and admirer, the skeptic of skeptics. Much as he admired Hayek, he did say that he thought that H was a bit susceptible to fetishism from time to time himself.
Maggie Thatcher used to say that Oakeshott was her favorite philosopher, but I never heard Oakeshott say that she (or anyone else, for that matter) was his favorite politician.
Are you connecting whether our government grows or shrinks to the U.S. having to devalue its currency somehow? I’m sorry, I don’t see the connection between government size and going off the gold standard but have a lot of respect for you and would love to learn.
I think both paragraphs are bad. The second is bad for defending a bad policy. But the first one is worst, it is defending irrationality. It is saying that we need an irrational prejudice (small government) to compensate for an irrational bias. What we need is to know what is the optimal size of government and persuade the public of reaching it. Also control politicians. What we need is better science and more informed public, not more prejudiced ideology.
jose: rationality is overrated, as watching the financial markets lately must surely emphasize.
In any event the extent to which rationality governs our actions is also vastly overestimated. Of course it is rational people who estimate this, so you could say that it is professional deformation.
BTW does anyone know what Kristol wrote to provoke O’Sullivan’s post? Isn’t it sorta blogging etiquette (if not an outright quasi-religious rule) that you can’t start a post the way O’Sullivan does, without providing a link?
In a world without WWII Germany gets ICBMs two decades before anyone else and Einstein probably keeps his hypothesis of nuclear weapons to himself initially…USSR attacks south and Germany firebombs every hostile airbase on Earth. Neutral Japan owns the Pacific/Indian Ocean and becomes the most industrially powerful nation on Earth when USA invents long range bombers and counter-attacks Eurasia from secret airstrips in Northern Canada. Germany invents synthetic oil and begins firebombing Japanese oil infrastructures along with American cities. Japan is contained and USA is desparately trying to invent nukes while USSR begins probing the California coastline with amphibious assaults. There are two million German troops on the Eastern Seaboard and USSR infantry are 30 miles away from Los Alamos when a massive American nuclear counterattack is launched. A nuclear winter is triggered. USSR declares peace and the North American network of tunnels triumphs German oil military just long enough for everyone to starve.
Anyway, the reflexive like of small government is probably a reference to lobbying. To my knowledge this is done behind closed doors and there are rules to be followed. Can’t these rules be changed so there is a frank and transparent discussion with those American citizens most hurt by pork (in a simplified analysis all those Americans hurt by inflation). If lobbying weren’t secret (except in select national defense instances), the threat would be the Congressperson who takes pork might suffer voter backlash.
An example, Canadian oil sands player lobby DC to accept a guaranteed quota of dirty bituminen. Youth, recent immigrants from Africa/Asia/India with families at home, and citizens of already arid states would be hurt most by future AGW. Have some students, some recent immigrants from Africa, and some Arizonians participate in a the lobbying process public.
Another example is TARP. Seniors on fixed incomes would be hurt by inflation. Have some angry grannies with purses sit beside bankers and see how many words those Rasputins whisper into Paulson’s ears.
When Leviathan is an elected body, the war of all against all has been transferred from the martial to the political arena. In this context, a preference for small government is the political form of pacifism.
I’m with jose. Irrationality is bad. Sullivan seems to favor always supporting “x” because the expected value of x is greater than the expected value of ~x (where x=small government). That seems lazy to me. Wouldn’t it be better to consider policies on a case-by-case basis, and support x when the value of x actually IS positive?
My analogy: It’s healthy to exercise by running, except when it’s so cold out side that you’ll get sick. Since its only that cold a small proportion of the time, then by Sullivan’s argument we should go running every day, without checking the temperature, since a strong prejudice toward exercise guarantees that we actually run on good days, and hey, we’re right more often than not. Why not just check the temp and not run on cold days? Seems like a more rational solution to me.
England, of course, would have done better to go off the gold standard much earlier than it did, or if it had not revalued the pound at an artificially high rate after the first World War.
If it had gone off the gold standard, the government could have grown to much bigger proportions much sooner… If they knew, they could do that, they would have exploted it, wouldn’t they?
“What we need is to know what is the optimal size of government and persuade the public of reaching it.”
And if it is impossible to know the optimal size of government?
“Also control politicians.”
And if politicians cannot be controlled?
“What we need is better science and more informed public, not more prejudiced ideology.”
And if we can’t get better science or a more informed public?
I propose the same bias against incumbents in general.
Every now and then one will surprise you, and chances are, you are not the kind of person who will miss it, despite your bias.
Staying “on the gold standard” — which is a rules regime — required that England NOT revalue the pound at an artificially high rate after WWI. “The gold standard” gets blamed for the non-gold standard actions of Churchill and England. Let’s put blame where blame belongs.
“England, of course, would have done better to go off the gold standard much earlier than it did, or if it had not revalued the pound at an artificially high rate after the first World War.”
“So powerful and varied was the pressure in and on government for every kind of new spending that an automatic barrier was necessary to prevent the fiscal river sweeping all before it.”
If this statement were true, the US government’s share of GDP ought to have grown steadily. But in fact, it’s hovered around 20% for the past 50+ years. Why do grown-ups believe these ideological fairy-tales?
What if you include the state governments?
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