According to Jeffrey Tucker, editorial director at the American Institute for Economic Research, Pepperdine University economist Gary Galles’ new book Pathways to Policy Failure “provides the pathway toward regaining the true understanding of economic success.” Galles, a champion of the market economy, echoes the Antifederalists who brought us the Bill of Rights in recognizing that government, given the chance, will always seek to increase its ability to maximize its power and squash free people.
In Galles’ view, markets are the primary means of accommodating differing personal tradeoffs within a society. Government policies that manipulate markets seek to tip the scales to accomplish “noble” goals (some not so noble), but usually fail to achieve their stated goals while also imposing huge costs on society.
This book, Galles says, illustrates the many ways that policymakers violate fundamental economic principles. He wonders, “How have people so often been convinced that what turned out to be policy failures, often egregious ones, were good ideas?” And in the book he traces the beginning of errors in U.S. policy to the founding of the nation.
As one recent writer put it, “The Antifederalists wanted a Bill of Rights to prevent the federal government from becoming too powerful, eventually robbing the citizens of their individual rights and making them no better off than they had been under England’s rule. The Antifederalists feared a large federal government that had the potential of becoming tyrannical.” And, as things continue to unfold, we ought to recognize just how right they were.
As Galles argues in chapter 119, the misnomered Federalists laid the foundation for a powerful central government with an unaccountable Supreme Court. Antifederalist Robert Yates, writing as Brutus, predicted the Court would interpret the Constitution according to the “spirit” rather than the letter of the law – that is, reinterpret laws to impose their own views regardless of the legislative intent. [I would argue that the 17th Amendment removed the final restraint on the central government by removing state oversight of Senators.]
Antifederalists saw truck-sized loopholes in the “general welfare” and “all laws necessary and proper” clauses that unscrupulous politicians later began to use to claim abusive unwarranted and undelegated powers against the people. Even though they lost the battle over the Constitution, the Antifederalists did limit the central government’s power via amendments known as the Bill of Rights.
A primary source for distrust of a powerful state is found in I Samuel 8. The aged prophet was disheartened at the desire of the elders of Israel to have him appoint a king “such as all other nations have” [NIV]. The Lord then warned that, “This is what the king who will reign over you will claim as his rights.” I Samuel then provides a laundry list of abuses by which human rulers would profit themselves at great expense to the people’s standard of living and their very freedoms. Even unrighteous judges lack the power nor pose as much a threat to freedom and prosperity as an autocratic state.
In the Epilogue to his brand-new book, Founding God’s Nation: Reading Exodus, humanist scholar Leon Kass states that biblical Israel is a paradigm of worthy nationhood – a particular people with a universal law that recognizes and advances the dignity of all human beings. Yet the key to preserving such a nation is that everyone knows and follows the law – that people do not allow others to define the law for them. “God [the law giver],” Kass writes, “took up with the Israelites in order to dwell among them and be known … by ordinary human beings.”
The Antifederalists in particular were sensitive to the idea that the law and its power remain close to the people and not be surrendered to an unaccountable government far away. Free people making their own decisions prove their wisdom or lack thereof by the results of their actions. Promotion of “the general welfare,” for example, evokes a Rousseauian idea of majoritarianism that ignores or even tramples upon local interests to benefit the powerful.
Economist Benjamin M. Friedman, in the Introduction to his brand-new book Religion and the Rise of Capitalism, makes it clear that the very idea of organizing the economic sphere of human activity around private initiative channeled through markets has “long-standing roots in religious thinking.” Adam Smith himself, Friedman reminds us, was a professor of moral theology.
In this book, Galles does not touch on government lies, half-truths, distortions, and coverups regarding foreign policy and military action – a subject that might require multiple volumes. His focus is on domestic policy and how governments and their apologists “lead us from good intentions to policy failures” using multiple false premises to shore up their arguments (and all too often line their pockets).
He cites three primary categories of error: (a) underselling self-government and over-selling the state; (b) using “lax language” that misrepresents reality that in turn leads to conclusions that likewise misrepresent reality; and (c) using unreliable numbers (including misuse of statistics) to misinform the public and quite often to mask unscrupulous behavior. He explains how multiple variations of these three errors lead to public policies that harm citizens (while often helping cronies) and leave the nation in the lurch.
Galles’ first major point is that Marx was flat wrong in arguing that capitalism benefits the capitalist at the workers’ expense. Instead, he says, “workers are the greatest gainers from private property and freedom of contract.” The property rights and freedoms of ordinary citizens can be grossly violated by manipulative government power. Private property, he adds, is “an irreplaceable defense against aggression by the strong against the weak.” It is the market that enables individual humans to demonstrate their value to the society and to themselves.
Echoing former Brexit leader Douglas Carswell’s recent tome, Progress vs. Parasites, the greatest threat to human progress today – as it has been in every age – is the idea that human affairs need to be ordered by top-down design. Government policies all too often seek to skew the market to benefit the unproductive and thus stifle the very creativity that has allowed a society to advance. History, Carswell demonstrates in his book, provides a long series of the death of societies in which governments rigged the market in the interest of small parasitic elites.”
In the section, “Lax Language,” Galles reminds us that the state is not the same as the society. Instead, “The State has said to society, ‘I shall confiscate your power, and exercise it to suit myself’.” Political opportunists seeking to restrict others’ liberty hide their real intentions behind linguistic smokescreens, Galles says, “using the malleability of language to make statism appear as the means to a good society.”
Finally, Galles points to the misuse of numbers to confuse people by misrepresenting reality. One example centers around Los Angeles Mayor Gary Garcetti’s plan to replace automobile lanes with bus and bicycle lanes, an action Galles notes actually increases congestion, slows emergency response times, and endangers lives. Similarly, forcing higher corporate average fuel economy leads to smaller vehicles and increased highway deaths.
The 137 short chapters in Pathways to Policy Failure, Galles says, illustrate our need to be highly skeptical in virtually every area of public policy and that careful thought is needed to help us identify problems that beset the path to effective public policies.
Yet all we really need to know is that every attempt to stifle inquiry about any policy with broad application is a strong indicator that some people somewhere have conspired to benefit themselves at others’ expense.
And, as the Antifederalists knew all too well, the taste of power leads to the temptation to use that power corruptly, and the power that corrupts is the power that destroys – an entire society.