Another step down the road to serfdom

September 26, 2011

by Roger Koppl

Peter Orszag, former director of the Office of Management and Budget, has written an article for The New Republic entitled “Too Much of a Good Thing: Why we need less democracy.”  “To solve the serious problems facing our country,” he says, “we need to minimize the harm from legislative inertia by relying more on automatic policies and depoliticized commissions for certain policy decisions. In other words, radical as it sounds, we need to counter the gridlock of our political institutions by making them a bit less democratic.”

Orszag notes that “polarization” has been growing since about 1970.  He casts about for an explanation and rightly rejects gerrymandering as an important contributor.  If that were it, there should be less polarization in the Senate than the House, which does not seem to be the case.  His best explanation is that Americans are increasingly sorted into locations where we hear only opinions similar to our own.  With “the big sort,” more and more of us are living in ideological echo chambers.

Orszag does not consider another cause, which may itself contribute to the big sort: the increasing volume and cost of federal regulation.  The Federal Register publishes the new regulations coming out of federal government.  The number of pages in the Federal Register keeps growing, as does the administrative cost of federal regulation.  (See Figure 1 here.)

As the scope of federal regulation grows, Congress finds itself increasingly embroiled in problems of economic planning.  How shall we balance the tradeoff between cheap energy and reduced greenhouse gases?  Shall we support solar power or wind power?  Should medical care focus more on prevention or treatment?  And so on.  In The Road to Serfdom  F. A. Hayek pointed out that no solution could satisfy all members of the democratic public.  The greater the scope of centralized planning in economic affairs, the more gridlock there will be in the legislature.  “The inability of democratic assemblies to carry out what seems to be a clear mandate of the people will inevitably cause dissatisfaction with democratic institutions,” Hayek says.  For a while it may be possible to get something done by delegating the legislature’s authority to outside bodies, such as a panel of experts.  “The conviction grows,” Hayek explains, “that the direction must be ‘taken out of politics’ and placed in the hands of experts – permanent officials or independent autonomous bodies.”  This expedient is a stopgap, however.  At some point democratic planning brings on calls for a more complete abrogation of legislative power.  “The cry for an economic dictator is a characteristic stage in the movement toward planning.”

Hayek’s discussion of “Planning and Democracy” in The Road to Serfdom fits national politics in America today all too well.  We have gridlock and calls to take politics out of important decisions, including debt reduction.  We have the delegation of Congressional authority to bodies such as the debt Supercommittee.  And now with Peter Orszag we have calls for the nation to become “less democratic.”

We should see Hayek’s warning in Orszag’s call to be less democratic.  The cause of the problem is not the big sort, but the big government.  If we do not mend our ways, we shall end up at the end of the road to serfdom.

19 Responses to “Another step down the road to serfdom”

  1. Mario Rizzo Says:

    For an ungated view of this article go to the Council on Foreign Relations link below:

    http://www.cfr.org/geoeconomics/too-much-good-thing/p25887

  2. Mario Rizzo Says:

    When I read the Orszag piece, I was reminded that this is not the first time in recent American history that people have complained about legislative impasse or deadlock. In 1963, but before the Kennedy assassination, James Macgregor Burns published his book, “The Deadlock of Democracy.”

    People forget that Kennedy was not an effective president in the sense that he had great difficulty getting his programs passed by Congress. Burns said that problem was that things were being held up by the Congressional Democrats and Republicans.The solution was that these local Congressional parties should be absorbed by the centralized presidential parties (both Republicans and Deomocrats). Basically the true voice of the people was to be found only in presidential leadership unobstructed by Congressional checks and balances.

  3. Allan Walstad Says:

    Less democracy? Yes. More concentrated political power? No.

    Rather, more scope for free interaction in the market.

  4. Pietro M. Says:

    I’m more and more pessimistic about the future, and I don’t think the problem is technocracy vs representative democracy. Both are bad.

    Legislative power is the power to give organized pressure groups the privilege of using the coercive power of government for their own ends. It’s a market to get a license to expropriate, regulate, forbid our fellow citizens who are losers in the political game. Political pluralism is no good: it is the right to try to live at other people’s expenses, it’s just competition in a tragedy-of-the-commons setting, a “race to the bottom”.

    There are two possible degenerations of political systems.

    In a oligarchy, negative-sum political games benefit a small organized minority, in Italy we call them the Caste, at the expense of a rationally unaware majority of tax-payers, consumers, unemployed, foreclosed debtors.

    In an ochlocracy, the defence of particular negative-sum privileges by part of a plurality of small organizations, not “the Caste” but “we the people” in the pursuit of our own petty particular self-interest, produces an excessive demand for government-produced goods (whose benefits are private and costs are socialized) and hampers growth, efficiency, stability, sustainability.

    In Italy we have both problems in the most perfect form. The US is slightly better, but then I think about unfunded liabilities, public deficit, health-care and financial-markets crony capitalism, protectionism and military adventurism and I think that Italy is just ahead than the rest of Western civilization in its decline.

    I also start to think that the relatively more oligarchic nature of American politics (in Italy even the smallest interest group becomes an unsurmountable obstacle) produces a higher efficiency. In the end, oligarchs at least have incentives to be rational: to the extent that they can benefit from the franchise value of ruling, they have incentives not to kill the golden goose. Atomistic pluralistic societies do not face the same incentive, as Hardin’s example explains.

    Oligarchy is the basic result of an ochlocracy on the way toward its own self-defeat. It’s the survival instinct of a dysfunctional political system. As long as negative sum games are the rule, the more concentrated the power the least pervasive the damage.

    The only solution is less negative-sum games and more positive-sum ones. But the former are endogeneously generated by collective choice mechanism, politics can get rid of them only by being limited, and no one knows how to.

  5. Leroy S Says:

    If you need a mediator (dictator) to solve this problem, I am available. Otherwise deal with it within the constraints of an imperfect system.

  6. Marriner Eccles Says:

    Isn’t this essentially Brian Caplan’s view as well?

  7. Hume Says:

    The problem is not more regulation or the presence gridlock. Rather, the problem is the presence of arbitrary and historically contingent boundaries within which we are told “democratic” decisionmaking is to occur. If people do not e.g. trust their “fellow citizens” to be sincere in the public debate and do not agree on the fundamental principles of public decision, it is unlikely that legitimate democratic decisionmaking can occur (if one takes even a brief glance at the preconditions required for, e.g., ideal deliberative or participatory democracy one quickly recognizes that the “American Public” does not fit the bill).

    So the answer is not to centralize power in administrative institutions, but rather look for answers to ways to bring about a normatively-meaningful instance of “We the People.”


  8. Orszag doesn’t even understand the problem.

    The U.S. was designed as a constitutional republic with many checks and balances. It was not designed as a democracy, but a system with numerous checks and balances. All were designed to protect minorities against the majority.

    Some safeguards have been eroded, but enough survive to permit minorities to block majorities. Gridlock was built into the US political system.

  9. Roger Koppl Says:

    Jerry,

    Unlike Orszag, Harold Meyerson of The American Prospect does get that fact, but he doesn’t like it, saying, ” the Founding Fathers got it wrong.” His ideal seems to be a parliamentary system. We are so far from the ideal, in his eyes, that we fall below authoritarian regimes. He says (brace yourself), “Over the past decade, it’s grown harder to argue that American democracy has been delivering for its people as well as China’s Leninist capitalism has for the Chinese. By the measure of economic growth, a smart authoritarian elite beats a self-negating democratic republic four days out of five.”

    Here is the url:

    http://prospect.org/cs/articles?article=foundering_fathers

  10. Hume Says:

    Emphasizing republican forms of government undermines Koppl’s concerns regarding the “road to serfdom.” Republicanism is elitist and aristocratic, and Federalists were at pains to distance themselves from “democratic” governance (for interesting analysis, see Bernard Manin’s work on representation).

    Also, Max Weber not Hayek deserves the credit here, foreseeing the connections between democracy and eventual bureaucratic rule. (e.g., “democracy inevitably comes into conflict with the bureaucratic tendencies which, by its fight against notable rule, democracy has produced.”).

  11. Mario Rizzo Says:

    Well, Brad DeLong and Matthew Yglesias think that there is nothing wrong with this article, aside from perhaps a bad title given by the New Republic editor.

    http://delong.typepad.com/sdj/2011/09/the-first-rule-is-never-let-the-new-republic-choose-the-title-for-your-article.html

    All the more reason to fear current trends when supposedly intelligent people think: no big deal.

  12. koppl Says:

    Hume: Hayek was talking about the consequences of planning in a representative democracy. I’m not sure I see where the Weber quote is that much of an anticipation. Anyway, the analysis is not wrong or diminished if Weber got there first. You might check out what Hayek about Weber in Hayek on Hayek. Mises and the group around him was basically Weberian. The Federalist did indeed wish to constrain the will of the people; that is good IMHO. But Hayek’s analysis applies to more or less any representative democracy, including parliamentary systems.

    Mario: Gheez. Thanks for that link.


  13. In the case of the budget fight, the mood of the country shifted since the 2008 elections. The House most reflects that shift because 100% were up for re-election. They are most opposed to Obama’s agenda.

    Only one-third of the Senate was, but the Senate Majority Leader won’t bring up Obama’s jobs bill. Another third of the Senate is up and they won’t support Obama.

    The person completely out of step is the president.

    This is one case in which I don’t find Congress at fault. The country is divided on fiscal policy. It is battle that must be fought, and one side will win and the other side lose.


  14. [...] Koppl, reacting to the Orszag piece, points out in “Another Step Down the Road to Serfdom” posted on ThinkMarkets that this process was seen a long time ago. We were [...]


  15. [...] tailored to the community affected.Roger Koppl, reacting to the Orszag piece, points out in “Another Step Down the Road to Serfdom” posted on ThinkMarkets that this process was seen a long time ago. We were warned.Koppl writes, [...]


  16. [...] Koppl, reacting to the Orszag piece, points out in “Another Step Down the Road to Serfdom” posted on ThinkMarkets that this process was seen a long time ago. We were [...]


  17. [...] (Rev. iii.16)” (Tyndale House Bulletin, 1957, 3) Recommended Reading (8): Roger Koppl, in his “Another step down the road to serfdom,” relays the suggestion of Peter Orszag, former director of the Office of Management and Budget, [...]


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