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Belmont Club

The Coming of the Next American Republic

June 17th, 2012 - 2:54 pm

James DeLong‘s book, Ending ‘Big SIS’ (The Special Interest State) and Renewing the American Republic is that rarest of books, the kind which tells you things you’ve long suspected about big government but had never systematically put together. DeLong does from the perspective of both a scholar and practicioner. A magna cum laude graduate of Harvard Law School, member of the bars of the District of Columbia, the State of California, and the Supreme Court of the United States, and with long and wide experience inside and outside Federal bureaucracies, DeLong is now a Senior Fellow at the Competitive Enterprise Institute.

His message is simple. The US Federal Government has become exactly what the the Founders feared the most and designed the Constitution to prevent: a Special Interest State.

The thesis of this book is simple. It is that U.S. politics has gone astray by losing this fundamental insight of the Founders. Rather than maintain a government designed to prevent and control the power of faction, we have allowed a wide variety of factions to capture parts of the government and then use the government’s powers to spend, to tax, to legislate, and to regulate for their own purposes. The term “factions” is not commonly used now, but “special interests” is a reasonable synonym. Thus, we can call our current political structure “Big SIS”, which is short for “the Special Interest State”.

The Founders were under no illusions that native-born Americans would be any different from the British bureaucrats against whom they had rebelled. They too in time would become like their like their tyrannical and corrupt predecessors within the imperial bureaucracy, handing out privileges to cronies and selected groups, which they had lately fought to end.

Their key defensive idea was simple. The Constitution would be designed to pit one set of politicians against the other. “If faction could not be prevented, it had to be neutralized. Even better would be to harness faction to provide stability to the republic.” To that end powers were carefully parceled out and enumerated; checks and balances were established, from time to time augmented by amendments which even more radically circumscribed government. The extent to which the the Founders would go to keep the special interest or “factional” beast contained is illustrated by the Second Amendment.

Judge Alex Kozinski recently put it as follows: The Second Amendment is a doomsday provision, one designed for those exceptionally rare circumstances where all other rights have failed—where the government refuses to stand for reelection and silences those who protest; where courts have lost the courage to oppose, or can find no one to enforce their decrees.

Yet as in some real life, historical Jurassic Park, all efforts at containment failed. Government, especially in Washington, has become nothing but faction, each hard at work finding some new public money or authority to pounce on for the benefit of their constituents. It would be as if the Founders returned to inspect the enclosures in which they had optimistically thought to contain factions, only to find these cages smashed and the T-Rexes and Raptors in charge of the Park, funneling visitors into their maws.

The website Open Secrets shows 12,193 registered individual lobbyists dealing with Congress as of 2011, down from a high of 14,869 in 2007, and up from 10,406 in 1998. The number of associations of all kinds has grown like kudzu. … In the late 1920s, 400 lobbies were in the Washington telephone book. By 1950, there were 2000. The 2011 edition of the Encyclopedia of Associations claims there are 24,107 nonprofit organizations in the U.S. Not all of these engage in lobbying—included are athletic groups and fan clubs—but thousands do…

Anyone who does not believe that such capture happens is naïve. The classic example, repeated many times in our history, is the alliance between police and prosecutors and a particular criminal gang that controls gambling, drugs, prostitution, and, in the 1920s Prohibition Era, booze. In this bargain, the state enforces the gang’s monopoly by busting rivals in exchange for a cut of the loot, a lid on violence, and an operation kept in a low-enough key to avoid offending the middle class.

The catastrophe happened, DeLong says, because the Founders forgot that factions could cooperate as well as compete through log-rolling as well as a host of other mechanisms. The interest groups had become despite their differences, what Leo Linbeck has called the Party of Incumbency and more broadly what Angelo de Codevilla termed the “court party” or the New American Ruling Class. They realized it was in their common interest to cooperate in order to put themselves collectively in charge of literally everything. DeLong writes:

The number of federal government agencies is countless, literally. The official list at USA.gov contains 479 distinct departments and agencies, but no standard exists for classifying parents and subunits and sub-subunits and so on. In the Government Manual’s index of agencies that appear in Code of Federal Regulations, the Department of Agriculture alone lists thirty-two distinct regulation-issuing subunits. Clearly, hundreds of federal agencies have the power to issue regulations having the force of law. States and municipalities echo the federal structure, with California alone listing over 500 agencies that employ more than 350,000 people. Add in all the states and cities and the number of rule-making entities mounts into the thousands.

Along the way the special interest coalitions progressively discredited the Old Republic idea that factions were a  bad thing. That is now a quaint idea superseded by the notion that there is nothing special interest lobbying cannot solve. A compliant media has convinced the public that to every problem there is an agency and a rule for every purpose under heaven.

The media has learned to craft “compassion trap” stories in which heart-rending problems can be fixed by yet another government bureaucracy whose creation only the cruel could refuse to fund. What DeLong calls “a powerful bootleggers-and-Baptists coalition” has written the narrative of modern times. Together they have created a “ratchet” and the wheel winds only one way.

In consequence, learning how to manipulate the system became the key modern skill.  As DeLong notes that any damn fool can learn to make a million dollars, but only someone who understands Washington can get you into the real big time. “Many venture capitalists can make money by shrewdness, but there is only one Al Gore; by adding him to your team, you can collect half a billion dollars in government subsidies for an electric vehicle.”

Governance became a one sided contest between the part-time public, who “yearning to rule themselves rather than be ruled by others” were consequently “rationally ignorant” of politics at court and professional activists, who wanted to work the system rule others and made it their full-time occupation and consequently became “rationally knowledgeable” in the strategems of manipulation. “The Washington saying is, ‘Be at the table or be on the menu.’”

The consequence is that almost everyone who actually does something productive is on the menu for those who do nothing but redistribute the wealth.

Regarding these leeches, DeLong asks, why should they want to abolish themselves? What else would they do, besides suck blood? “Many second-and third-generation members of the class make a similar claim: they must command because they are not trained to do anything else.” Come to think of it, that is true.  And yet leeches are progressively losing their legitimacy because everyone is suffering from the mess they have made of things.

We should not kid ourselves. Americans believe in the Mandate of Heaven as much as anyone else in the world. We do not tolerate unremitting failure, and if the individual leaders thrown up by the system are incompetent, the people will decide that those leaders lack legitimacy and must go …

The past few years have not been kind to the claim of the Ruling Class that it possesses the Mandate of Heaven, as one policy after another has been exposed as nonsense and rapacity—housing; financial regulation; sellouts to government employee unions; expansions of tort liability; energy regulation; and the government takeover of the medical system …

The likelihood that our rulers, of either party, can reclaim legitimacy through successful micromanagement of the economy is zero. Everything they attempt is too riddled with special-interest favoritism to constitute a rational approach to anything …

The argument can be made that we will continue to limp along. What this overlooks is that we have been limping along; the structural flaws of Big SIS have been eroding the foundations of our polity for decades. Bad outcomes have been postponed by external events, such as the fall of the Soviet Empire, the information revolution, and the basic grit and competence of the American people. The time borrowed is up.

What happens when a system loses its legitimacy? Unless another source of legitimacy is found, then the strongest and most brutal often inherit the wreck, which may be happening in crisis-ridden Europe, where extreme left and right wing parties are on the rise. There have been too many sad examples of this in history to risk running down that road.  DeLong argues that for America to survive it must rediscover popular sovereignty.

“The initial goal should be to recapture a collective recognition of the wisdom of the principles of the Old Republic … that these checks against capture by factions be effective even while the people are busy with their own lives and are not focusing on their government.” “The only cure,” he argues, “is to reduce the value of the prize.”

The way back to legitimacy is to make government smaller; to accept that it ought to have limits; a notion which may seem quaint to modern ears. The key step is to put the “rationally ignorant” people back in charge of solving societies problems through their rational and deep knowledge of the physical and productive world. As for government, it has its place. But only a place.

Can it be done? DeLong closes with a challenge from the Ben Franklin. “A Republic, if you can keep it”. But Franklin thought it was possible, and his contemporaries answered for their generation.

I have often…in the course of this session … looked at that … without being able to tell whether it was rising or setting; but now at length I have the happiness to know that it is a rising and not a setting sun.

But that question must be put and re-answered anew in every time. Whether the present is up to the task is an open question.  Perhaps putting the question is itself the single most crucial step.  And there is no better guide for understanding it than James DeLong’s book. It  is invaluable in understanding the current crisis and I unhesitatingly recommend it, at least to all who hope to gaze at the rising and not the setting sun.


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