All Commentary
Monday, May 1, 2006

Legal Plunder Mislabeled “Defense”

Earmarks for Special Interests Are Hiding in the Defense Budget

Arnaud de Borchgrave of United Press Interna­tional has been reporting on national intelli­gence matters for many years. In a recent dispatch he wrote that “[s]ome 15,300 earmarks in the U.S. defense budget, up 1,300 percent in the 21st centu­ry, are so many pork projects for lawmakers’ constituen­cies that have nothing to do with defense.” That averages to nearly 29 earmarks per member of Congress. When a congressman wants to score points with influ­ential voters in his state or district, he gets an appropria­tion added to a bill, earmarking money for a project tailored to make those voters eternally grateful—at least through election day.

It’s tempting to think the military budget is different from the rest of the government’s budget. Politics surely would not intrude on such an important matter. But we know better. The Pentagon is as much a part of the bureaucracy as any other department. We may hate to accept it, but weapons systems, military aircraft, and naval ships have been built solely because they created or maintained jobs in an important congressman’s district. If de Borchgrave is right, this is more popular than ever.

Classical liberals have long warned of this practice. Milton Friedman criticized it in his book from the 1980s The Tyranny of the Status Quo. Liberals further back have sounded the same tocsin. For example, John Bright, the great peace-and-free-trade activist and member of Par­liament, in 1858 condemned the British government’s “excessive love for the ‘balance of power’ [as] neither more nor less than a gigantic system of out-door relief for the aristocracy of Great Britain.”

A similar point was made in the twentieth century by the liberal journalist John T. Flynn in his 1944 book As We Go Marching, the classic study of the rise of fascism in Italy and Nazism in Germany. Long before Mussolini, Flynn wrote, Italian governments had increased expendi­tures, taxation, and debt through programs intended to please constituencies and keep the economy going. Even before Keynes published his General Theory in 1936, politicians feared that without big government spending, depression and destabilizing unemployment would be the rule. So they spent, taxed, and borrowed.

“But this policy does run into resistance—and resist­ance in very influential quarters,” Flynn wrote. “The large taxpayer is against it. He acquiesces reluctantly. And as the debt grows and he looks with growing fear on its future proportions he begins to exert his full influ­ence against it. In different countries the basis of resist­ance takes different forms, but it comes chiefly from the conservative groups. Hence it becomes increasingly dif­ficult to go on spending in the presence of persisting deficits and rising debt. Some form of spending must be found that will command the support of the conserva­tive groups. Political leaders, embarrassed by their subsi­dies to the poor, soon learned that one of the easiest ways to spend money is on military establishments and armaments, because it commands the support of the groups most opposed to spending….

“Thus it was because the government could get pub­lic agreement for loans for this purpose and because such loans were essential to the policy of spending which kept the floundering economic system going that the militaristic policy remained so vital and vigorous an institution in Italy—and in every other continental country….

“I must not leave this whole subject of spending and the means employed to spend, including militarism, with­out observing that there is nothing new in it. It is as old as civilized government. And what is more, the protago­nists of it have understood precisely what they are doing.”

We have learned from the Public Choice school of political economy that benefits from government spend­ing are concentrated on relatively small self-conscious interest groups, while the costs are spread thinly among the mass of taxpayers. Hence the beneficiaries have far more incentive to work the halls of government than do the preoccupied taxpayers. No wonder interest groups have the advantage. When the label “national security” is affixed to a spending bill, so much the better for the rel­evant group, and so much the worse for the taxpayers, who are in no position to verify the claim.

What’s the moral here? That anything called defense is bogus? Of course not. The moral is that given the coercive and expansive nature of the political process, the appropriate attitude of the taxpayer is skepticism, or as Jeffersonput it, “jealousy,” rather than confidence.

* * *

Any advocate of separating school and state is imme­diately hit with the challenge: “But what about the poor?” Up until now we could draw on theory and his­tory for an answer. But now we have contemporary examples from the poorest countries of the developing world. James Tooley reports on his path-breaking research.

Ludwig von Mises was arguably the greatest econo­mist and advocate of free markets in the twentieth cen­tury. In this first of two articles, Richard Ebeling details Mises’s contributions to sound economic thinking and the cause of liberty.

Elections in Germany and Japan could herald an end to their experiments with the Third Way. Norman Barry looks behind the headlines.

During his long career F. A. Hayek wrote volumes not just on economics, but on broader social philosophy as well. After a rare chance to examine Hayek’s private notes, Steven Horwitz discusses the great thinker’s worldview.

The standard bill of indictment against the free mar­ket has a curious feature: all the alleged offenses have their roots in government intervention. Joseph Stromberg has the particulars.

FEE is celebrating its 60th anniversary this year. Whom better to turn to for an early history than Henry Hazlitt. He provides this month’s Timely Classic.

The Freeman‘s columnists have hit on another set of fascinating topics. Richard Ebeling revisits Keynes’s Gen­eral Theory. Lawrence Reed recounts his favorite free­dom-oriented movies. Thomas Szasz explores psychiatry’s concepts of mental illness and brain disor­der, and their relationship to freedom. Robert Higgs examines U.S. economic policy before Japan’s attack on Pearl Harbor. Charles Baird looks at a dispute between organized labor and the National Organization for Women. And David Henderson, reading a case for med­ical rationing, responds, “It Just Ain’t So!”

Books coming under review this issue scrutinize Russian conservatism, the miracle of electronic transac­tions, the “new new left,” and economic sense.

—Sheldon Richman([email protected])

  • Sheldon Richman is the former editor of The Freeman and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families and thousands of articles.