Friday, June 23, 2006

Who benefits from statism?

In a comment thread at the Volokh Conspiracy, Anthony Sanders writes:

Just finished Crisis and Leviathan: Critical Episodes in the Growth of American Government by Robert Higgs. The book came out in 1987, but it is oh-so relevant today. It details the story about how in the twentieth century the federal government grew in response to crises, and how the government never would "retreat" (if at all) from its crisis-impossed size after the crisis was over.

The most interesting story in the book is how this (with a few exceptions) didn't happen in the 19th century, even when crises occured. Higgs says this was because the dominant ideology of those times was reflexive (classical) liberalism, whereas in the 20th century it was reflexive statism. The message I take from it is the only hope we have of cutting modern government is to have people (however crudely) become reflexively anti-government. Kind of depressing, but unsurprising at the same time.

Sounds like an interesting book, but my immediate thought is to look for an economic explanation. Having just read Charles Royster's The Fabulous History of the Great Dismal Swamp Company, about wealthy Virginians in the mid-eighteenth century, let me suggest that for most of this country's history, wealthy people could use the government to get wealthier through land grants -- the Great Dismal Swamp in eighteenth-century Virginia, railroad land grants in the nineteenth century -- but these same people opposed larger government because they would pay for it. With the advent of the income tax and the closing of the frontier at the start of this century, wealthy people then found that they could get wealthier by doing business with the government. So you have a Republican Congress happy to increase the size of government, and Republican Congressmen spending all their time grabbing pieces of this spending and diverting it to supporters. From this perspective, the amazing thing is that this "anti-government" ideology has survived at all. Perhaps it is merely a legacy of the long period during which the GOP was the minority party in Congress.

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