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Government’s End: Why Washington Stopped Working

by Jonathan Rauch

This is a revision to Demosclerosis, Rauch’s 1994 book—and what a revision it is. Rauch tightened his prose and added numerous new ideas. Demosclerosis ran out of ideas about two-thirds of the way through. This revision does better.

The big idea here: The nation is so large and filled with so many interest groups, little incentive exists for the typical citizen to fight them. An interest group can invest a million dollars lobbying the government and get $100 million in benefits, a better investment than investing in stocks. Large entities become inefficient over time. In addition, they lose their abilities to pursue experiments.

For individuals, few incentives to fight interest groups exist. The civic-minded citizen gets only self-satisfaction. For politicians, fighting interest groups can mean career death. Voters who want someone to fight interest groups turn on the politicians for doing the thing they wanted the politicians to do because maybe a friend temporarily lost a job. For the citizen who cares little, each new interest group costs so little he does not notice. A million here, a million there, and soon you are talking about real money. Rauch points out that many interest groups are parasites, not merely money sinks. Not only do they cost you as they transfer resources to themselves, they cost you more as you defend yourself from them.

Once a program gets started it is difficult to rid. In stable democracies the problem gets worse. Major upheavals, such as military invasion, are among the few activities that change demosclerosis. Stable countries such as Great Britain are among the most demosclerotic.

Almost all interest groups, not surprisingly, think they serve the overall good of fellow citizens. As someone once said, it is very hard to get people to see they are mistaken when their livelihood depends on their being mistaken. It does not do much good to have civic participating “citizens” if they are joining vile groups.

Demosclerosis also creates undeserved conflicts, not to mention moral and economic opportunity losses as both transfer seekers and those forced to fight them become unproductive, often in vicious spirals of transfer seeking. Often, when two groups conflict, individuals not in either group pay. A farm lobby fighting a trade lobby, for example, may reach a “compromise” that makes other individuals pay for making both groups happy. The common belief a bad group on one side cancels out a bad interest on an opposite side, thereby producing a good result, is a naive fantasy.

Unlike his mentor Mancur Olson, Rauch recommends little. Rauch has a model of how governments decline. He has no good model of how to fix them. He is almost saying we can not do much except change ourselves, and anything major we could do would probably fail so don’t bother. He is mistaken when he says demosclerosis is “[i]mpervious to any broad coherent program of reform. And this evolution can not be reversed.” (Why do I get shivers when I see the word evolution in a political book?) The author offers a few remedies. The best suggestions, however vague, claim power and resources should be devolved to states and competition increased.

Much of this work suffers from fault-o-sclerosis: Too much emphasis on collective guilt.

Elsewhere Rauch favors the social pressure model of reform—-socially ostracize special interests. That model is atrocious. Lobbyists do not walk around with scarlet L’s on their foreheads. They and almost no one else feels guilty or shamed because someone they will never meet criticizes them in a policy paper that almost no one reads. Lobbyists hang out with their allies, not their critics. Even if lobbyists were worried about being excoriated at a cocktail party, they could pretend to have a different career. Thousands of lobbyists live anonymously in large cities. Social pressure has influence in small, stable groups such as the Amish and only when respected individuals deliver it--and even with the Amish it has some bad consequences. Like drug dealers, thousands will take the place of any lobbyist who quits. When big dollars are at stake, a little social pressure counts for almost nothing. How does one socially excommunicate thousands in big cities? Publicity probably flatters most lobbyists. Even negative publicity helps their 15 seconds of fame. Anyway, most individuals who use shaming as their tactic are terrible moral experts and fail to shame the most deserving targets.

Rauch’s work should appeal to The Death of Common Sense crowd, though The Death of Common Sense is a sorry, sorry book compared to this. The problem with common sense is that almost everyone thinks they have it, a fallacious ad populum appeal. What looks like a million dollar boondoggle to one person looks like wonderful policy to someone else. Vague exhortations for more “common sense” do not solve problems.

Government’s End also plays well to libertarian types who think only explicit spending programs count as redistribution, whereas neoclassical policies that unjustly benefit the rich are “natural.” When the Fed changes monetary policy, and a million people lose their jobs, that is simply too abstract a redistribution to count. The same goes for retirement programs that redistribute wealth from responsible parents to non-parents and deadbeat parents.

Government’s End is a victim of argument-sclerosis. Maybe making carefully analyzed prescriptions is too much of a civic cost for Rauch. Distinguishing between harmful and beneficial activists is too much trouble. Maybe some philantropist should pay the author to come up with better prescriptions. This work needs one more good revision to make it excellent, but it would probably take thousands of pages. Worth reading.

—Book review article by J.T. Fournier, last updated June 13, 2009

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