“Millions endeavoring to supply Each other’s lust and vanity.”

   – Bernard Mandeville

 

Milton and Rose Friedman: The Tyranny of the Status Quo; Harcourt Brace Jovanovich; San Diego, CA.

 

Amitai Etzioni: Capital Corruption; Harcourt Brace Jovanovich; San Diego, CA.

 

It is a commonplace that modern democracy suffers from a grave malady, namely the dominance of sectional interest groups. Majority rule turns out to be a species of minority rule. What is enacted by legislatures is done by formal majorities, but it does not serve the interests of the majority of the people, nor   does   it represent what the majority of the people, with eyes open, would choose for them­ selves. The eternal conflict between the general interest and sectional interests avid to batten upon the general interest is settled by a series of bargains between the sectional interests.  Each is allowed to suck the milk of the general   community on condition that one or more of the others may do likewise. The result is general loss, and sectional gain, except very occasionally in the short run, is less than that of the general loss. The malady is as old as democracy itself, indeed as old as politics, though its symptoms in nondemocratic systems may be different from those in democratic systems. It has sealed the fate of many a political order, and democracy is no more immune from its deadly consequences than other systems.

 

 

It may be contended that bargains between sectional interests under which each may prey in turn upon the general interest, themselves represent the general interest if the bargainers add up to a majority of the people. In fact they very rarely do, but even if they did this contention would have only a superficial truth. The deeper and more important truth is that each sectional interest is organized to see its own quick advantage, but hopelessly unorganized to see, or is blinded to, the cost imposed upon it by the other sectional interests. Add this consequent loss to the loss imposed upon the unorganized millions who pay for the depredations of all the sectional interests, it remains clearly true that sectional-interest bargains run counter to the general interest, even in the rare cases where the bargainers add up to, or represent, a majority of the people.

 

This malady exercises the minds both of the Friedmans and of Amitai Etzioni. But how different are their diagnoses and their remedies!

 

The Friedmans’ Tyranny of the Status Quo is a sequel to their best-selling Free to Choose. The status quo is the situation established and heavily guarded by the “Iron Triangle,” in the three corners of which are the direct beneficiaries of sectionally inspired policies and enactments, the bureaucrats who thrive on them, and the politicians who seek votes by means of them. Its tyranny, according to the Friedmans, is powerful enough to arrest and then reverse the efforts of innovating politicians to break out of the triangle. Such politicians are elected because the status quo breeds discontent in the people. Without fully understanding why or how they them­ selves have acquiesced in it or caused it, the majority of the people sense that there is something wrong in the pre­ vailing system. The discontent gives innovating or reforming politicians six to nine months at most in which to make fundamental changes. Support for reform then wears off and the Iron Triangle reasserts its power.

 

Thus it has been that President Reagan and Mrs. Thatcher, both proclaiming the need to reverse the errors of decades, were elected with large majorities. In their first few months they initiated great changes, but then the forces of the status quo reasserted themselves, and at best Mr. Reagan and Mrs. Thatcher have managed only to prevent a headlong retreat to the perilous ways of their predecessors.

 

Although the status quo of 1932 was vastly different from that of 1980, the Friedmans discern the same law in the case of Franklin Roosevelt’s New Deal. The major social and economic changes were made in the famous “one hundred days” special congressional session which Roosevelt called immediately after his inauguration. However, here they see a qualification to the rule of the status quo. Thus “if the early successes of a new administration reflect a basic change in public opinion, the apparent lack of further progress after the first six to nine months will be deceptive. The early actions will continue to have their effects after they have disappeared from the front pages. The altered political atmosphere will lead the defeated opposition to modify its political position. Even if the opposition succeeds in returning to power, it will not pur­ sue the same course that it pursued before.” In this case, the Republicans in opposition came to acquiesce in, in many cases to firmly believe in, the myths and superstitions of the New Deal revolution, which thus sank deep into the minds of the American people.

 

All in all, the lesson to be drawn from these considerations is not only that new Administrations have no more than a short time to enact major changes in law and public policy, but also that even if these are made within the brief favorable period, they are unlikely to have a permanent effect unless they reflect or produce a sea change in public opinion.

It follows, according to this argument, that in modern democracies, simply changing the rulers will not do. To defeat the Iron Triangle, the Constitutional rules, not the political rulers, must be changed. This, the Friedmans say, was the experience of the framers of the American Constitution when the very existence of the United States was threatened by the fissiparous tendencies of the Articles of Confederation. Accordingly, they commend the Constitutional route now being taken to balance the budget, to set a limit to taxation, and to provide a line-item veto power for the President, who is distinguished from all other politicians in that he alone, with his Vice President, is elected by the whole people and therefore in this measure represents the general interest.

 

It is a powerful argument, and in my judgment, essentially correct. It is backed in this book by an analysis of a wide range of problems, taxation, government expenditure, inflation, unemployment, tariffs, defense, even crime and education, all done with the clarity of exposition familiar to the readers of Free to Choose. (Even in the one instance where, as I believe, the Friedmanite case is not proven, namely the advocacy of legitimation of the use of, and the traffic in, addictive drugs, the prose is clear.) Fortunate indeed is a nation which has mentors such as the Friedmans!

 

The subject of Capital Corruption is the alleged corruption of the political process by private moneyed interests. Is there anything new about this? Amitai Etzioni thinks that there is. He alleges that a powerful new corrupting for has arisen in the form of the PAC’s, and he is very excited about it. In his view they have raised the political power of private money to unprecedented heights.

 

What is the difference between the PAC’s and earlier well-financed pressure groups? It lies, he says, partly in their form of organization and partly in their formal legitimacy. Their organization enables them to tailor their efforts to specific sectional interests more precisely and more comprehensively than most of the old types of pressure groups; and, unlike many of the old types, they are organized for continuity.   Thus   their   influence is applied more professionally, and it continues beyond elections, so that politicians are more likely to “stay bought” than hitherto. Their legitimacy frees politicians from the furtiveness which perhaps was occasionally associated with the old style of pressure or corruption.

 

For this scandalous evil, as it appears to Mr. Etzioni, he offers seven main remedies. Full, though voluntary, financing of congressional elections; strict control over the use of campaign funds; shortening of campaign periods, as in Britain; new curbs on lobbying; extended disclosure laws; extension from two to four years for congressmen’s terms; and a substantial

increase in congressional salaries.

 

To show that some, perhaps most, PAC’s may have a corrupting influence is not difficult. But Mr. Etzioni imagines that this proves the gravamen of his case, which it does not; namely that corruption is inherent in the PAC system, and that its intensity and penetration have been raised above pre­ PAC levels. As for his remedies, we may acknowledge that some of them may have merit, whether there are PAC’s or not.

 

The quality of Mr. Etzioni’s thought may be judged from the prejudice which he artlessly evinces in various contexts. Touch him at any point, and the conventional myths of American “liberalism” are displayed. The source of political evil, he thinks, is the unequal accumulation of wealth. Thus he is blinded to the nature of the most powerful corrupting group of our times, namely the “poor”; by which I do not mean that the poor themselves set out to corrupt or consciously do so. That is done by those who proclaim themselves to be the champions and benefactors of the poor, seeking power by climbing on the backs of the poor. It is a corrupting power even greater than that of the labor unions, possibly the second greatest, of which Mr. Etzioni is only faintly aware.

 

Consider the case of New York City. Boss Tweed was a great thief. But he did not bankrupt the city. In the whole long period of Tammany corruption, New York was successful, vigorous, and solvent. Compare this with the Lindsay-Beame period. Mayors Lindsay and Beame were not thieves, I believe, but they bankrupted their city. The corruptions of “welfare” for the poor and of labor union power were deadly where those of Tammany were not.

 

Mr. Etzioni’s naivete is most striking in his belief that America must seek again the “triumph” of the early 20th century “Progressive” era (no doubt with muck spreaders calling themselves muckrakers, and all). With President Theodore Roosevelt, Americans must inveigh against “malefactors of great wealth.” The only difference will be that the calumnies and misconceptions will center upon impersonal Big Business instead of the personalized Robber Barons.

 

A further illustration of the quality of his thought is shown by his fulsome praise for the work of the British sociologist, the late T. H. Marshall. Marshall thought that the next progressive step from equal political status, i.e., equality before the law, and fulfilling it, was equal “socioeconomic” status, i.e., equality of wealth and income. The truth is that equal “socioeconomic” status, or rather the quest for it, is a contradiction. It destroys, not fulfills, equality before the law. It is a delusion which has humbled and impoverished Marshall’s own country, but from which his countrymen are now slowly and painfully extricating them­ selves.             cc