"Knowledge is becoming more specialized and more dispersed, while government power is becoming more concentrated," writes economist Arnold Kling in his new book, "Unchecked and Unbalanced." "This discrepancy creates the potential for government to become increasingly erratic and, as a result, less satisfying to individuals."
"Less satisfying to individuals" is a mild way to put it. In a recent Annenberg focus group, pollster Peter Hart asked Philadelphia suburbanites to write the name that came to mind when they thought of Congress. A retired auto executive and 2008 Obama voter wrote, "Satan." When asked why, he said, "Because I wasn’t sure of the correct spelling of ‘Beelzebub.’"
Kling’s point is that such disenchantment is inevitable when government officeholders make sweeping decisions about matters on which they lack, and only a few specialists have, detailed knowledge. Which is what Congress and the Obama administration have been busy doing these past 11 months.
Consider the 2,000-plus-page health care legislation now before the Senate. There is coherent debate on abortion coverage because it’s a discrete issue easily isolated from the rest of the bill that raises concerns among people with conflicting strong moral beliefs.
But any abortion provision would have less effect on real life than dozens of other provisions in the bill. The Congressional Budget Office, drawing on specialist knowledge, tells us the Senate bill would result in 10 million people losing employer-provided insurance and increased premiums for buyers of individual health insurance. And the CBO says the bill would not bend the cost curve downward.
Democratic leaders want to pass something, almost anything, for fear of political damage. They want to give government even more power over one-sixth of the economy, and over ordinary people’s health care. To that end, they have been happy to game the CBO’s scoring system, misusing specialized knowledge to achieve political ends.
On the issue of carbon emissions, the e-mails hacked from Britain’s Climate Research Unit show even leading specialists in climate research have been busy manipulating data and suppressing alternative views in pursuit of political ends. Their goal, and that of the Democrats backing cap-and-trade legislation, is government control over energy production and distribution essential to all of the economy.
The Environmental Protection Agency’s designation of carbon dioxide as a pollutant is an attempt to give EPA bureaucrats such control in the likely event that the Senate fails to pass something like the bill the House passed last June.
So politicians are acting either in ignorance of specialist knowledge or by manipulating and misusing it in the conviction that central planners can organize and control human behavior better than individuals can through markets and voluntary action operating under the rule of law.
History provides copious evidence that this conviction is mistaken. Writing in Policy Review, economists Paul Gregory and Kate Zhou compare the success of market reforms in China and their failure in Russia. They point out that reform in China was bottom-up: Peasants started producing food for private sale and, as markets thrived, Communist leader Deng Xiaoping winked at their rule-breaking and changed the rules. The economy mostly thrived.
In contrast, reform in Russia was top-down: Mikhail Gorbachev changed the rules, but that allowed apparatchiks to gobble up state industries and created new monopolies, over which Vladimir Putin’s government re-established control. The economy mostly stagnated.
The Democrats’ health care and cap-and-trade bills are classic top-down legislation. Many inside players have bought into the changes and are preparing to game the new systems. Far from banishing lobbyists from Washington, Barack Obama has provided them with enormous amounts of new business.
An alternative approach was taken in George W. Bush’s major domestic legislation. Tax cuts, the education accountability bill and the Medicare prescription drug benefit law opened up areas where markets and incentives could operate. Costs came in lower and revenues higher than projected. An economy stalled by recession proved capable of creating new jobs without direction from central planners.
Polls have shown that in the last 11 months, as Americans have started to think hard about Democratic proposals, they have become less confident in government’s ability to direct society. Underlying the angry responses in focus groups and tea parties is an appreciation that problems can best be addressed by widely dispersed people with specialized knowledge operating in a predictable framework. Not by central planners acting in ignorance of or by manipulating specialized knowledge.
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