An Overgoverned Society – Chapter 1

From “An Overgoverned Society” by W. Allen Wallis, The University of Rochester
published by The Free Press, A Division of Macmillan Publishing Co., Inc., New York, Copyright 1976.

pg viii:

For more than two generations an increasingly coercive organization of society has coincided with an increasingly disorder. It is time to inquire why, with so much more authority, there is so much less stability…

Why should it be that, in time when men are making the prodigious claim that they can plan and direct society, they are so profoundly impressed with the unmanageability of human affairs?…

The attempt to regulate deliberately the transactions of a people multiplies the number of separate, self-conscious appetites and resistances. To establish order among these highly energized fragments, which are like atoms set in violent motion by being heated, a still more elaborate organization is required — but this more elaborate organization can be operated only if there is more intelligence, more insight, more discipline, more disinterestedness, than exists in any ordinary company of men. This is the sickness of an overgoverned society, and at this point the people must seek relief through greater freedom if they are not to suffer greater disasters…

The predominant teachings of this age are that there are no limits to man’s capacity to govern others and that, therefore, no limitations ought to be imposed upon government. The older faith, born of long ages of suffering under man’s dominion over man, was that the exercise of unlimited power by men with limited minds and self-regarding prejudices is soon oppressive, reactionary, and corrupt. The older faith taught that the very condition of progress was the limitation of power to the capacity and the virtue of rulers.

For the time being this tested wisdom is submerged under a world-wide movement which has at every vital point the support of vested interests and the afflatus of popular hopes…

The fact that the whole generation is acting on these hopes does not mean that the liberal philosophy is dead, as the collectivists and authoritarians assert. On the contrary, it may be that they have taught a heresy and doomed this generation to reaction. So men may have to pass through a terrible ordeal before they find again the central truths they have forgotten. But they will find them again, as they have so often found them again in other ages of reaction, if only the ideas that have misled them are challenged and resisted.

–Walter Lippmann, The Good Society (written 1933 to 1937)

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Chapter I FDR as a Prophet

A PROPHECY BY Franklin Delano Roosevelt struck me forcibly when I heard him make it in January 1936. I have been reminded of it many times during the intervening years as I have observed it coming true to an extent that would astonish even the prophet himself.

FDR’s prophecy was this: “…we have built up new instruments of public power…such power would provide shackles for the liberties of our people.”

That prophecy has materialized to a degree that scarcely anyone foresaw in 1936. Notice I do not say that no one foresaw it. One reason the prophecy struck me so forcibly when I first heard it was that it exactly fitted in with what I had learned as a graduate student in economics at the University of Chicago from 1933 to 1935, from such faculty members as Henry Simons and Lloyd Mints and above all Frank Knight and from such fellow graduate students as Milton Friedman, Homer Jones and George Stigler.

Before I discuss the prophecy, I want to quote it again. What I have quoted here consists of phrases from two sentences. They give a central thought of the two sentences, but to avoid charges that I may have twisted the meaning by taking phrases out of context, I will give the two sentences in full: “In 34 months we have built up new instruments of public power in the hands of the people’s government. This power is wholesome and proper, but in the hands of political puppets of an economic autocracy, such power would provide shackles for the liberties of our people.”

Presented before The Milwaukee Society in Milwaukee on 13 January 1975.

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The prophecy was made when the 1936 election was on the horizon. It amounted to saying that the powers of the government had been built up in such a way that there was no choice but to re-elect FDR, since others might misuse the power. That, if true, would have meant that the people had already had their liberty to elect someone else shackled. It meant, as Al Smith put it at the time, “If you are going to have an autocrat take me.” Smith added, “We don’t want any autocrats…We wouldn’t even take a good one.”

Smith, I note nostalgically, proceeded to advocate several platform planks on which FDR had been elected in 1932 — reduction of federal expenditures by 25 percent, balancing the budget every year, handling unemployment and old-age insurance through the states, and “removal of Government from all fields of private enterprise.” The Democratic platform of 1932, as quoted by Al Smith, makes Barry Goldwater look like a wild-eyed communist. This is a point to keep in mind when you see people rewriting history to say that the outcome of the 1932 election represented a “rejection of the old order” and a “deliberate turn to the left and government intervention.” On the contrary, the platform attacked President Hoover for the Reconstruction Finance Corporation, the Farm Board, public works programs, excessive cost of government, and deficit spending. Those are the things the voters sought to turn away from, if the rhetoric of the campaign means anything — but, of course, campaign platforms, promises and rhetoric never mean much and probably have little influence on elections.

In the years since FDR made his remarkably prescient prognostication, American life has changed drastically. We talk a lot about changes in technology, in farming, in urbanization, in standards of living, in health, in education, in communication, and so on. But surely none of these changes is as great as the changes that have come about in the relation between people and government.

When FDR made his prediction, there were innumerable areas of private life into which the Federal government did not intrude, because it was prohibited by the Constitution, and many other areas were left to the states, again because of the Constitution.

In 1935, for example, when the administration was drafting the first social security legislation, there were the gravest doubts within the administration itself that the law could be written in such a way as to be acceptable constitutionally. Frances Perkins, Secretary of Labor, who was in charge of drafting the legislation, tells in her memoirs that she got a tip on how to write the bill so that the Su-

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preme Court would uphold it. Where did she get the tip? Straight from the horse’s mouth, from a justice of the Supreme Court, Justice Stone.

Today, in contrast, it is hard to think of any area of private affairs in which the Federal government is reluctant to intervene. There are a few areas where the courts still constrain the government, but these are almost exclusively the domains that are important to the academic-journalistic complex – namely, where their personal and rather commercial interests in free speech are threatened, or where election or law enforcement procedures seem disadvantageous to those who are vaguely described as “disadvantaged.” And the courts themselves have thrown off virtually all self-restraint; it is almost inconceivable that a judge today would refuse to intervene in a situation because it is outside the jurisdiction of the courts.

Recently Alexander Solzhenitsyn was quoted as making a statement about the Russian government that is too nearly true of ours, that it dislikes any relations between individuals which it does not supervise. It is not, of course, “the government” as an entity that wants to supervise in this country. Rather, for almost any relations between individuals there is some group which has a special interest in supervising, and the influence of special interests in our system of government is so strong that generally they get their way. (By “special interests” I refer not only to commercial and economic interests but to such organizations as the Sierra Club, Common Cause, Ralph Nader and his multifarious franchised activities, organized religion, higher education, and so forth.)

We assure ourselves and our children that ours is a government of laws, not men. Well, sometime stop and check up on the “laws” that are regulating you, and see whether this is true. You will soon be making out your Federal income tax return. For the most part, you will have to work with an intricate body of rules and regulations handed down by various Internal Revenue employees, Tax Court officials, and Federal judges.

The tax law that Congress enacted made some general statements, but to apply these to the infinite variety of individuals and circumstances requires elaborate interpretations. If you or your business has anything but the simplest kind of return, there is a chance that it may be reviewed. A review involves sitting down across the table from a man — not a law. And the review includes a lot of horse-trading: “I’ll give you this if you give me that”; “if you hold out on this point I can make it more expensive for you than it is worth.”
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The taxpayer always fears that it may not be wise to press too hard, because if he annoys the Internal Revenue man he can find himself in worse trouble, not only for himself but for others connected with him. Besides, he fears that if he wins this time they will really be “laying” for him next time. Whether these fears are often realized is beside the point; the point is that what is feared is men and human emotions, not laws.

The ordinary taxpayer is almost without effective recourse from the decisions an IRS agent makes, because of the costs in time, in legal fees, and in the psychological strain that arises because, fortunately, most people still respect (or fear?) the government enough so that it is by no means a matter of indifference to them to be at odds with it, even if they win eventually. Indeed, publicity may cause damage that never will be corrected by exoneration, however complete.

What I have said about the tax laws, namely, that the regulations governing you with the force of law are mostly the edicts of officials, applies in almost every field. The Occupational Safety and Health Act is an excellent example — or should I say “horrible” example? — of government by men rather than by law. The Environmental Protection Act is another. As for automobile safety, let me remind you that Congress was never hebephrenic enough to legislate those squawk-and-balk interlock devices on cars, nor the $100 bumpers, either.

Although Congress passes the basic laws on which the mountains of regulations rest, it would be naive to think that Congress gives every law thorough scrutiny. Look at the 1969 tax law and then tell me whether you believe that your Congressman studied all of it. Do you think he even read all of it? Do you suppose any single Congressman, even Wilbur Mills himself, studied every bit of it?

How many other equally voluminious bills were enacted at the same session of Congress, and do you suppose that all of them were carefully studied in full? Did you Congressman scrutinize the appropriations for Health, Education, and Welfare, or for the Defense Department?

If you know how Congress works — or at least how it has worked in the past — you realize that there has to be, and is, division of labor. Committees and subcommittees control most of the legislation. within the committees and subcommittees the staff are sometimes more influential, at least on the bulk of the legislation, than the members themselves. And in the crucial all-night session at which a

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final bill is actually worded, the staff often is supplemented by outsiders with special interests in the bill.

All of these developments confirm the wisdom of the Founding Fathers in limiting narrowly the powers of the Federal government. They did this only partly from antipathy to governmental control of private affairs. To be sure, such antipathy was strong at the time, because of direct experience in the preceding hundred years. But an equally powerful reason for restricting the power of the Federal government was the realization that the form of government they wanted — a democratic government- cannot endure if it intervenes extensively into the affairs of the people. Democratic processes — representative processes, if you prefer — simply cannot handle complex, highly technical matters satisfactorily.

A democratic government cannot design efficient automobiles, it cannot design a sound energy policy, it cannot eliminate prejudice and discrimination, it cannot manage transportation, it cannot assure the soundness of investments or the accuracy of information about them, it cannot guarantee the effectiveness and safety of medicines — it cannot, in short, do most of the things that our government undertakes to do.

(This is not the occasion to prove the point, but it is important at least to assert that all of these problems can be handled far better without a direct governmental role. Scarcely anyone understands this any longer, but it is an exceedingly important truth.)

Congress, perhaps partly in recognition of its own incapacity to do all these things it undertakes to do, has come increasingly during the past 40 years not to legislate itself but to delegate to thousands of employees the right to make what are effectively laws, and the right to enforce them.

Another important fact about representative government that the Founding Fathers recognized is that direct election by the people is likely not to produce the most competent representatives to carry on the people’s business, and furthermore is likely to promote demagoguery.

Thus, in the Federalist papers one of the features described with pride, as an argument for accepting the proposed constitution, was that the people could not get directly at the government. Only the House of Representatives was to be elected directly by the voters. Senators were to be elected by state legislatures; the President and the Vice President were to be elected by a special electoral college; and judges were to be appointed by the President and Senate.

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Perhaps in an unconscious response to the weakness of government by representatives elected directly by the people, there is currently a strong movement toward government by the judiciary, which is now the only part of the Federal government that still is not elected by the people. Whatever the reason, the fact is that a great deal of administrative business is now done by the courts.

It has been recognized for 50 years or more that the courts revise the Constitution through their interpretations and reinterpretations, and it has been recognized for perhaps 25 years that in effect the courts legislate in innumerable matters, including apportionments of Congress, legislatures, and school districts, and criminal law and the operation of prisons, but is has not been widely recognized that currently the courts are assuming many functions that formerly were regarded as executive responsibilities.

Much of this shift into direct administration has resulted from the “Litigation Explosion” of recent years, in which almost anyone who is displeased with an administrative procedure or conclusion, whether he is much affected personally or not, can sue and seek to have the court at least upset the administrative result and perhaps issue an administrative ruling of its own. Thinking up possible lawsuits and recruiting people in whose names they might be prosecuted on a contingency basis is one of the true growth industries of this decade.

An even more dangerous threat to the liberties of our people that has arisen from the new instruments of public power that FDR boasted about comes from the widespread loss of confidence in the government. Public opinion polls show that all branches of government are held in low repute, except the military. (There may be an ominious foreshadowing here of where the people will turn if the loss of confidence in government goes much further; but one note of optimism I can leave with you is that personally I am confident that a South American pattern will not develop here.)

Loss of confidence in government is easily explained by looking at the government’s record in almost everything it promises, from delivering the mail to assuring adequate supplies of energy. But it may be due in large part, as Warren Nutter pointed out in a brilliant article in the Wall Street Journal recently, to the welfare state having passed the stage where more people gain than lose by it, and reached a stage where for most people the costs exceed the benefits. “There are, after all,” Nutter wrote, “two natural equilibriums for the wel-

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fare state: one in which the majority benefits at the expense of the minority, and the other in which the minority benefits at the expense of the majority. Once the welfare state reaches a certain relative size, the first is ruled out by the facts of life, and the second by the nature of democracy. That leaves only the borderline situation in which half try to gain from the other half. That circumstance…so weakens government as to imperil democracy itself.”

This brings to mind a famous letter written by Edmund Burke in 1791: “Men are qualified for civil liberty,” he said, “in exact proportion to their disposition to put moral chains on their own appetites; in proportion as their love of justice is above their rapacity.”

Going beyond the dangers to liberty that FDR recognized in the new institutions that he created, then, there may be an even more ominous danger in the forces of rapacity that these institutions have channeled into government. Rapacity is always present, of course, but it is most menacing when there are governmental institutions whose control can satisfy rapacious appetites through the use of raw power.

The circulars announcing this talk said that I would include a discussion of “affirmative action” in educational institutions. To comply with government regulations on labeling, I will have to say something about that, although I have talked long enough already. You remember the ruling by the Federal Trade Commission that if a package is labeled “chicken salad” it must contain at least some chicken. That led someone to inquire about cottage cheese, and someone else to ask for a ruling on Danish pastry.

Because the hour is late, I will say only that affirmative action is a system of quotas for various ethnic groups, depending on which ones have been able to muster enough political attention, and for women. The purpose of the act, mitigating unjustified discrimination, cannot be given a meaningful operational definition and cannot possibly be achieved by government. Those who administer the act deny indignantly that what they call “goals” are quotas, but to my mind these denials only illustrate the intellectual degradation and mendacity to which otherwise honorable men sink when they engage in coercive activity on behalf of special groups, carried on under an Orwellian banner of justice, equity, fairness, morality, and virtue. The administration of the act has been marked by deception, by actions that verge on extortion or blackmail, and by extensive political intervention. In short, it is a perfect fulfillment of FDR’s brilliant

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prophecy of 1936, that he had launched us on a path that would shackle the liberties of the people — all in a good and virtuous cause, of course.

To recapitulate, like a good college professor, what do I think I have told you?

My major theme has been that government power, however worthy the objectives for which it is established, inevitably forges fetters for freedom. My second point is that our government in 1975 restricts freedom in innumerable ways. With more time, I would have argued also that these restrictions on freedom are almost never necessary to accomplish the objectives from which they arise, and in fact are usually counterproductive.

A third point is that a government that attempts to control as many and as complex affairs as ours now does cannot succeed by democratic or representative methods. With more time, I would have argued that it cannot succeed by authoritarian methods either, though it may be able to create an appearance of success. A fourth point is that representative government is likely to fail when representatives are chosen through direct election by the people. The people, even more than their elected representatives, are unable to grasp the complexities and technicalities with which modern governments deal, so they become easy prey to demagogues. A fifth point is that we have in fact moved a long way toward a government of men rather than laws, for most regulations that we consider laws are in fact edicts of appointed officials, and many executive functions are carried out by judges.

A sixth point is that the creation of instruments of government power channels forces of selfishness or arrogance into politics and makes the struggle for political power a ruthless, life-or-death–or, at least jail-or-be-jailed–matter that disrupts the social fabric.

A seventh point, due to Warren Nutter, is that our welfare state is approaching the point where at least half the people pay out more to support benefits to others than they receive as benefits for themselves. This means that half the people tend to be disaffected with government, so it threatens the very existence of free democratic institutions.

In short, as Lord Acton said 88 years ago, “Power tends to corrupt and absolute power corrupts absolutely.”
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