Can Killing Government Prevent Special Interest Capture?

In my last post on meat markets and securities markets, I argued that competitive markets require government oversight to prevent fraud and monopoly. The post drew a response from Libertarian friends: didn’t I know that government regulators would immediately be captured by the regulated industry, resulting in worse fraud and monopoly?

Industry capture? Yes, I learned about that in 1969, when I went to work for Ralph Nader in Washington DC. Although Nader began his career with Unsafe at Any Speed (1965), calling for federal automobile safety regulation, he was hardly a naïve supporter of regulation. My project showed how agribusiness had captured the US Department of Agriculture. Another ongoing project showed how trucking and railroad interests had captured the US Commerce Commission.

In 1970, I joined a team of twenty “Nader’s Raiders” in a project on Power and Land in California. We found agribusiness capture everywhere: unnecessary water projects benefiting giant landholders; government-supported producer cartels like Sunkist; inadequate regulation of pesticides; special tax breaks for forest owners like Boise Cascade; or public university research developing labor-saving machinery, like the tomato harvester, as a response to unionization. In 1974, I published a piece on the California dairy industry, showing how excessive health standards—and totally unnecessary price supports—drove up milk prices and squeezed out small dairy farmers.

So what can we do about capture? A long line of “muckrakers,” from Upton Sinclair and Ida Tarbell to Ralph Nader, have advocated traditional “good government” approaches: constraints, openness and professionalism. Plus a good dose of “eternal vigilance.”

Constraints include bans on bribery, rules against conflict of interest, and restrictions on industry-government revolving door employment. Openness includes public hearings on proposed policy, access to government records as embodied in the Freedom of Information Act, and of course freedom of the press to expose misconduct without restrictions or fear of retaliation.

As for professionalism, some 2000 years ago, the Chinese invented civil service. Government bureaucrats had to pass tough exams, went through rigorous training, earned good pay and gained great public respect. At its best, professionalism gives public employees a sense of mission and a devotion to a broad public interest.

Take my father. A US Naval officer during World War II, he could have returned to the Borden Cheese Company as a well-paid executive. Instead, he joined the US Diplomatic Service; I grew up mostly overseas, in Rumania, France, Australia, Thailand and Yugoslavia. Like so many of his generation, my father saw public service as a noble calling, superior to mere business. After retiring from the Service, he directed Meridian International, which promotes international cultural exchanges.

With the Reagan Revolution of the 1980’s—“government is the problem, not the solution”—the traditional “good government” approaches yielded to “kill the government”. When my husband and I worked on drug policy reform in the 1990’s, our Libertarian fellow anti-drug war activists saw hope only in drastically cutting government.

Like any simplistic solution to a complex problem, “kill the government” collides with the Law of Unintended Consequences.

I described one consequence in an earlier post on Cornered, by Barry Lynn: since the lapse of anti-trust enforcement in the Reagan era, international monopolies and oligopolies have exploded. Powerful giants, like Wal-Mart and Goldman Sachs, can far more effectively capture government than the associated dairy producers of California.

In addition, as we found in the California study, the lower the staff and funding of a regulatory agency, the less it can conduct independent research on potential problems, and the more it must rely on industry expertise and “voluntary compliance”. How could Bernie Madoff bamboozle the Securities and Exchange Commission all those years? Easily!

There’s another more subtle consequence: by denigrating public service, and demonizing “bureaucrats”, “kill the government” creates a vicious circle. Ill-paid, ill-regarded public servants become less concerned about the public interest and more vulnerable to capture. They’re less likely to blow the whistle on waste or corruption, more likely to see their work as a stepping stone to a better-paid private job. For example, earlier this year the Federal Communications Commission voted 4 to 1 to approve Comcast’s purchase of NBC. Commissioner Meredith Attwell Baker, who voted yes, then resigned from the FCC to become a lobbyist for Comcast.

My father understood that, at its best, government is “we the people”, cooperating for our collective benefit. The contempt and spite directed at public servants these days threaten to give us government at its worst: unresponsive, paranoid, and captive to narrow interests.

2 thoughts on “Can Killing Government Prevent Special Interest Capture?”

  1. “The contempt and spite directed at public servants these days threaten to give us government at its worst: unresponsive, paranoid, and captive to narrow interests.” I’m not sure about paranoid, but otherwise, that description of government that ‘the people’ lose, applies to most governmens today. Most governments today don’t even show independence, which is the definition of listening to the people who legitimize their existence in ritual elections that themselves indicate the sorry state of democracy on this planet. Instead, as Chomsky explains, governments show a fear of angering uncle Sam, the godfather in an extended crime family of states that serve special capitalist interests, namely corporations. Governments are not just bullied into behaving. They are corrupted. Mcleveland shows (to some extent) how that happens internally. John Perkins shows how that happens externally. The result is corporatocracy instead of democracy. Leaders are bullied until they convert. If they don’t convert, then they are, one way or another, removed. Under this corporatocracy there lives many democrats, but we have had our nations, our homes, stolen. And we do bear some responsibility for that. As awful as the neoliberal, fascist assault on the people, everywhere, has been, we needed to care more than we did. In not caring sufficiently, and in accepting too uncritically the guidance of self-proclaimed leaders and guides and saviors, we have allowed fascism to cover the globe. And now it’s ramping up. Who knows whether less tv, less consumerism, less acceptance of rightwing propaganda and more paying attention would have saved the day? But it was needed and it wasn’t there, the efforts and warnings of many activists notwithstanding.

  2. With the right wing attack on government these days, I think it’s especially important to support public employees where we can and not overgeneralize with names like “fascism” or “corporatocracy”. I have known many dedicated public employees, including some of my students. Ralph Nader taught us to think in terms of systems: while there may be individual bad drivers, it’s the design of cars and highways that determine the rate of deaths and injuries. If we attack “greed”. we’re playing into the corporate strategy of blaming people instead of rigged systems. The alternative is to look carefully at where government succeeds and where it fails, and why.

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