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Saturday, April 1, 1995

Demosclerosis: The Silent Killer of American Government

Let's Get Government Out of the Economy

Calcification, a kind of spreading dry rot accompanied by a bloating of the body politic, spreads across the American landscape. It’s a disease that saps the strength of the people who, ironically, are the ones who demand more and more from a government that gives them, in the end, less and less. The furor over national health insurance is a case in point. The disease reflects the plight of both Politician and Citizen who, like the proverbial maiden of easy virtue, just can’t say “No.” Ali, democracy!

National Journal contributing editor Jonathan Rauch coins a clever word “demosclerosis” to describe the process. The process is spread by the mushrooming of special-interest organizations who gather virtually every affected and disaffected voter into groups and counter-groups (witness, e.g., the pro-choice vs. the pro-life groups) who pressure Congress and state legislatures to do their bidding. Or else.

It is not a pretty picture nor does it render a pleasant fragrance. As observed by Chancellor Otto von Bismarck of nineteenth-century Germany, the birthplace of the modern Welfare State, anybody repelled by the sight and smell of sausage-making ought not to watch law-making—a process far removed from its. nice image projected in high school textbooks on civics.

Mr. Rauch notes that the trick of political success is to fashion special-interest access and accommodation, to gather votes and financial support, to weld blocs and interests—James Madison called them “factions—together into a winning majority. Hence no program can be cut, no tax break wiped out, no privilege lifted, without provoking the anger of one organized interest or another. The political art is to calm anger and get everybody under the government tent—a tent that eventually gets blown away. Meanwhile, the budget grows and the dollar sinks, the state swells and the individual shrinks.

Mr. Rauch points out that seven out of ten Americans belong to at least one association, and one in four belongs to four or more. He describes one modest-sized Washington building directory as boasting the following tenants (and there’s a lot more beyond the letter C):

Advertising Council
Affiliated Hotels and Resorts
Agudath Israel of America
American Arbitration Association
American Federation of Clinical Research
Americans for Economic Renewal
Center for the Advancement of Health
Congress of Russian Americans
Consortium for the Study of Intelligence

Thus the emergence of America’s “parasite economy,” its vast lobbying industry centered in Washington, its horde of lawyers with their Gucci loafers and leather attache cases attending hearings and buttonholing Congressmen and bureaucrats who find the attention too sweet to resist. So why resist?

Mr. Rauch credits much of his understanding of how government really works to public choice economist Mancur Olson of the University of Maryland and his 1965 book, The Logic of Collective Action. Professor Olson, like Tocqueville before him, sees the mischief of interest-group democracy, sees groups push projects with concentrated benefits and diffused costs- costs foisted on a “rationally ignorant” populace. Free-riding ethanol producers, for example, get Congress to give them a tax break and require Clean Air Act inclusion of ethanol in gasoline so as to “improve the atmosphere.” Sure.

For all of the author’s sharp analysis of Washington’s worldly ways, however, he betrays a kind of fatalistic quality about what to do about rampaging King Kong. He is dubious, to cite an instance, about the term-limit movement which would quash legislative careerists who seek committee advancement by seniority-adding to 6 6 sclerosis.” He bemoans the knifing of President Clinton’s initiative of “national service” for young people. When Cato chairman and Reagan economist William Niskanen twits Congress, Mr. Rauch responds: “I find much to admire in Congress: it works hard, it means well, it is close to the people, it has done much good.” He quotes, approvingly, soothing words from liberals like Jessica Mathews, Jimmy Carter, and John F. Kennedy.

Mr. Rauch wisely says Americans should look in the mirror for key agents of their dilemma. But in the end he calls for not exorcising but “managing”-without really explaining how-the very Superstate that enfeebles and calcifies Americans and their government.

America’s challenge, it seems to me, is to sharply scale down the state, return to old-fashioned morality, restore the limited-government model of the Constitutional Framers. The challenge is to get economy back into government, and get government out of the economy. The real democracy, the true empowerment, as Mises pointed out, is in the marketplace. []

Dr. Peterson, Heritage Foundation adjunct scholar, is the Lundy Professor of Business Philosophy Emeritus at Campbell University in North Carolina.

  • William H. Peterson (1921-2012) was an economist, businessman and author who wrote extensively on Austrian Economics. He completed his PhD at New York University in 1952 under the supervision of Ludwig von Mises.