State Capacity and Liberalism
Tyler Cowen has a post up on State Capacity Libertarianism. I’m not so interested in the “libertarian” part of his argument, which is mostly aimed at persuading libertarians to accept some role for government beyond enforcing contracts and protecting property rights. But liberals (as in progressives) have good reason to think hard about state capacity. A few thoughts on liberalism and state capacity:
Recognition of limited state capacity should affect how liberals set policy priorities and rank policy tools:
Many promising active labor market policies and economic development policies require a degree of state capacity that we currently lack.
A federal jobs guarantee would require a big increase in state capacity. I’m not a fan in general, but any effort to implement a jobs guarantee would have to start slowly and concentrate on building capacity.
Carbon taxes require less state capacity than regulation, which requires less state capacity than direct government ownership of power plants.
State capacity is not fixed, but developing it will take time:
Like Cowen, I don’t believe that state capacity is etched in stone. But I don’t think it’s easy to strengthen state capacity. Lack of state capacity reflects deeply rooted attitudes towards government, and a widespread lack of understanding of the importance of management, oversight, and professionalization. The lack of public concern with the way the Trump administration is destroying critical executive branch agencies is exhibit A.
The credibility revolution, big data, etc. will help us build state capacity:
At least I hope so. State capacity is about management, and you can’t manage what you can’t measure. Outcome measurement can also keep pressure on legislators, executive branch policy makers, and the organizations they oversee to discover and maintain good practices.
More credible policy data may also help to build a constituency for a better-run government, and for efforts to figure out how to implement promising ideas effectively at scale.
State capacity is easier to destroy than to build:
State capacity requires attention to management, oversight, and professionalization. This means that state capacity will always be easy to destroy – by putting hacks in charge of agencies, replacing experienced managers, firing professionals, etc. (Heckuva job, Brownie!) It will be safest when it involves functions that have wide support and that have well-defined best practices and high degrees of professionalization. A serious expansion of state capacity will probably have to wait until the current era of polarization and Republican extremism is over and a bipartisan consensus on an expanded role for government exists.
Strengthening the welfare state is a critical goal for progressives:
We know how to implement progressive taxation and social insurance. It doesn’t take a lot of state capacity.
Congress needs to improve its oversight capacity:
It needs staff. It needs stronger committees. It needs to move beyond reacting to scandals.
Good basic thinking
No building of capacity will happen until the Democratic Party via liberal/progressive members start promoting a competing ideology to the Republican/libertarian ideology.
Proposing/presenting just policy, plans and programs is not enough as they always butt up against the ideology that has been implementing policy.
I don’t know if the Republican Party understood such, but the results of all their strategy was the ingraining of an ideology that allowed them to implement their policies.
The New Deal was born out of an ideology.
You might want to take a look at my chapter on government in “Microeconomics: A Fresh Start” from 2014. It has a substantial section on state capacity and the factors that contribute to it.
Thanks! Good reasoning.
Lack of state capacity is one of the reason infrastructure projects are so expensive. For a long time, state and city governments had engineers on board, and they’d often do a lot of the design work and understand how the project would be built. By the late 1960s, that was getting contracted out more and more often. This led to soaring costs. If nothing else, a well paid civil service engineer with a pension is cheaper than a private sector engineer with a profit seeking corporation behind him. If nothing else, the latter has a financial motive to go for a high cost solution, but more seriously, the fragmentation of the requirements, design and construction are a recipe for high prices as any engineer will tell you.
But, but; the Labor and Overhead costs!!! ?s
IMHO talking about “state capilisty” with the current size of MIC and intelligence agencies (which are the most dangerous part of MIC) is a little bit naïve.
likbez:
How would you measure the output of the Senate as compared to the House given both have a large capacity sans the twitter terminology? In my golden days, I did manufacturing throughput analysis, cost modeled parts, and reviewed component and transportation distribution. I am curious. Forget all that neoliberal stuff . . .
Daniel: I’m not sure what the Republican establishment knew, but conservative economists and their wealthy backers certainly intended to shift the climate of opinion in a rightward direction.
Kaleberg: this is really interesting on construction costs: https://pedestrianobservations.files.wordpress.com/2019/11/costspresentation2.pdf
Likbez: I agree that it’s important to avoid importing private sector “cult of management” ideas into the public sector. The focus on teacher value added measures in education for example has certainly problematic. That’s why I emphasized “professionalism” as well as management. Public management is not easy, and simple minded ideas imported from the private sector can be harmful, but at the end of the day if the public sector is going to do stuff we need a government that is capable of . . . doing stuff.
@run75441 January 7, 2020 5:45 pm
Ohh, those golden days 😉
Measurement has its place and is the cornerstone of science, but it is not equal to pattern recognition. And when applied to social phenomena with their complexity it is more often a trap, rather then an insight.
You need to understand that.
Deification of questionable metrics is an objective phenomenon that we observe under neoliberalism.
A classic example of deification of questionable metric under neoliberalism is the “cult of GDP” (“If the GDP Is Up, Why Is America Down?”) See , for example
https://www.theguardian.com/commentisfree/2019/nov/24/metrics-gdp-economic-performance-social-progress
Also see a rather interesting albeit raw take on the same (“Growth for the sake of growth is the ideology of the cancer cell.” ) at:
http://casinocapitalism.info/Skeptics/Financial_skeptic/Casino_capitalism/Number_racket/gdp_is_a_questionable_measure_of_economic_growth.shtml
For example, many people discuss stagnation of GDP growth in Japan not understanding here we are talking about the country with shrinking population. And adjusted for this factor I am not sure that it not higher then in the USA (were it is grossly distorted by the cancerous growth of FIRE sector).
So while comparing different years for a single country might make some limited sense, those who blindly compare GDP of different countries (even with PPP adjustment) IMHO belong to a modern category of economic charlatans. Kind of Lysenkoism, if you wish
That tells you something about primitivism and pseudo-scientific nature of neoliberal economics.
We also need to remember the “performance reviews travesty” which is such a clear illustration of “cult of measurement” abuses that it does not it even requires commentary. Google has abolished numerical ratings in April 2014.
Recently I come across an interesting record of early application of it in AT&T at Brian W Kernighan book UNIX: A History and a Memoir at late 60th, early as 70th.
likbez:
So, you believe throughput analysis is just measurement? Try one time to discuss a topic without the word neoliberalism or derivatives of it.
Is not it about money which one dimensional measurement system?
Likbez:
That is a good accountant’s view (score keeper) of it. Likbez, you are an intelligent person and it might even be fun to talk with you at length. Forget that stuff. Lets look at the flow of material from the receiving dock to the shipping dock to where product ships. In between there is any number of stations where some type of manufacturing activity takes place. Our job was to look at the flows, ascertain which ones are over capacity (plan a resolution for it), and see how we can cut the production time to deliver in a shorter lead time. Setup times come into play, capacity issues, inventory, etc. Have you read the Toyoda Production System? That gets into what we did as consultants.
And might I add, managers working for a company directly may do the same. Keep in mind, increased lead times do not increase capacity. They just place more orders in front of the bottleneck.