Economic Planning versus Democracy: Illustrations from the Commentators

 

by Mario Rizzo

 

Some time ago I posted  “Planning and Democracy” and the related “How Hayek Explains Bush on the Auto Bailout.” Since then I have been struck by how almost every day we see the tension between central direction of economic resources and democracy manifested in the attitudes and analysis of commentators. Here is a small sampling, followed by my analysis. Forgive the length of the quotations but they are highly instructive.  

 

 

1. Carl Bernstein, the noted journalist, on the Morning Joe TV show on MSNBC:  

“Everything we have been hearing this morning on this broadcast indicates that the reason Barack Obama is showing such masterful- and I think we can use that word- leadership so far is that he’s in the process of solving the problem of the U.S. Congress, the fact that it is a largely dysfunctional institution. That he’s got to work around it to get this economic program moving and through.”

 

 2. Clive Crook of the Financial Times offers this tempered consideration:

“Republicans have a point when they complain about the inordinate length of the bill–1,400 pages or thereabouts (the count does not seem to have settled down yet). Republicans are right to say that not a single senator or congressman voting for it can have read it. Of course, it is hypocrisy for them to say this: failing to read the law you are voting for is standard working method in Congress. But that doesn’t invalidate the criticism, certainly not in the eyes of the public. Not every unread piece of legislation costs taxpayers $800 billion. It isn’t too much to ask that the politicians voting for this law, even if they had to make an exception, had read it first.

It will be interesting to see what is hiding in those 1,400 pages.”  

 

3. And then Stan Collender responds:

What Clive seems to be saying is that, at 1400 pages, the bill could not possibly have been reviewed in detail by many members of Congress before they voted for it given the rush to get it done.  What he doesn’t say is that most representatives and senators generally only review the parts of any bill that are important to them for some reason.  They may look at the parts that pertain to their committee assignment or which are relevant to their district or state.  More likely, they’ve had their personal or committee staff look at the bill and tell them whether there’s anything they need to be concerned about.

These statistics are meaningless and often completely misleading.  The same can be said for the number of pages in legislation.

But citing the number of pages as a reason to think legislation is bad is ridiculous.  That’s on a par with football commentators talking about the number of minutes one team has had the ball compared to the other or the greater number of plays one team has run.  It’s also similar to the meaningless total number of points one tennis player has won during a match compared to the other.

 

4. Brad DeLong quotes Collender at length on his blog – whether that suggests agreement (as I suspect given his other opinions) or simply that DeLong found it interesting, I do not know for sure.

 

My Analysis   

The obtuseness shown by many commentators about the problems that economic planning produces for democratic government is so hard to comprehend that it warrants some mockery. I was going to call this post “Bring in the Clowns.” I will restrain myself.  

 

 

On the one hand, “we” are being asked to make important decisions. On the other hand, the debate, examination, evaluation vital to representative democracy were short circuited. Very little time was allocated to Congressional debate after the bill was produced. The president obviously did not read it. He was too busy running around the country trying to drum up public support. Members of the House and Senate had very little opportunity to read its 650 to 1400 pages (depending on which version of the bill was considered). May I suggest that most would be incompetent to do so?  

 

 

So we are told that the relevant voting parties have read those parts “of interest” to their states or districts. Yes, probably. But this is the very essence of rent-seeking behavior. The interest groups get the concentrated benefits from the aspects of the bill they approve of — and the rest of us who bear the costs, in a more diffuse way, ignore these provisions. As the great philosopher David Hume taught, the general interest is not simply a collection of special interests. We are also told that Congressional staff have read it but, presumably, they read for what the particular member for whom they work is concerned about.  

 

 

Some of my lawyer friends will say: This is the case for all legislation even if it is more characteristic of large bills rushed through Congress. After all, how many Congressmen know what is in a tax bill or in the regulations that the IRS produces in their name?  

 

 

Indeed. This is the world that has been created, step by step, by legislation over the past century, especially since the New Deal. This is a manifestation of the incompatibility of central economic planning and democracy so forcefully argued by F.A. Hayek in The Road to Serfdom.  

 

 

These are three important points here. First, slippery-slope processes are in fine working order when people say: Why worry about clear exposure of the provisions of a bill and careful debate and consideration of its specific provisions when we don’t do this for hundreds of other bills that are passed every year? If we do this, then why shouldn’t we do that? This is the fill-in-the-blank form of argument that seems so persuasive to many. In reality it functions quite dangerously in a world where precedents are perverse. We go from bad to worse.  

 

 

Second, the casual dismissal of the “niceties” of democratic deliberation is blind to something really important. Emergency large-scale government direction of resources produces demands for a leader – an executive with plenary powers in fact (if not in law). It has been the excuse for extreme centralization of power in many contexts over history. Carl Bernstein and others call it “leadership.” Ludwig von Mises and many others called it the Furhrer Principle (Führerprinzip). To be sure, there are important differences in context between the United States today and Nazi Germany or Fascist Italy. Yet it would be extraordinarily foolish not to see the tendencies at work and to think we Americans will be saved by our heritage. 

 

 

Third, there is a fundamental issue of political morality at stake. We are being asked to tolerate, cooperate, and obey the stimulus law. If the State wishes to have moral authority it should not abuse it in this way. If we do not know what we are, through our representatives, approving, how have we given consent?