COMMENTARY

Peter Burgess

Is the source of America's prosperity its much-maligned bureaucracy? ... Bureaucracy as a Root of American Prosperity

Many U.S. conservatives say that the global rise of the United States was exclusively the result of freedom, innovation and the private sector — and had nothing to do with such inherently bad things as bureaucracy and central planning. Stephan Richter explains how they've become blind to a key historical fact: America owes its success to both the private sector and the government.

The clairvoyant way the U.S. government blazed the trail of innovation, societal progress and modernization was actually the envy of the world.

While American history has always had an anti-government streak, the half century from the early 1930s to the early 1980s — which encompassed the pinnacle of America's political, economic and military power worldwide — was marked by the opposite: the triumph of the vast machinery of American government.

From space flight to environmental protection, from state-of-the-art infrastructure and medical innovations to the invention of computers and the Internet, what is remarkable about the path of the United States over those five decades is how closely the fortunes of its vast industrial machinery (a.k.a. the private sector) were linked to the government apparatus.

It may be an uncomfortable truth, but still one well worth recalling, that from the late 1930s onward, the clairvoyant way in which the U.S. government blazed the trail of innovation, societal progress and modernization was actually the envy of the world.

The government placed tremendous financial resources in the hands of a vast number of dedicated civil servants who then pushed the country to the cutting edge of technology and strived for an improved social balance. In the process, they worked alongside American 'Big Business,' the world's largest, best-oiled and best-resourced corps of corporate managers anywhere.

This history underscores a key fallacy in the current U.S. political debate. Conservatives cast government as principally bad and the private sector as inherently good. But this is an entirely misleading, ex post facto portrayal of the private sector as naturally lean, mean and highly efficient — a portrayal that has little to do with historical realities.

To believe that myth would require suppressing the decades-long record of a U.S. corporate sector getting so bloated that it ultimately became the epitome of a sclerotic bureaucracy. And it would entail forgetting that corporate America's in-house bureaucracy, in its sum total, was eventually far larger than that of the entire government apparatus combined.

Conservatives' ex-post-facto portrayal of the private sector as naturally lean, mean and highly efficient has little to do with reality.

Notwithstanding the creation of so many Internet billionaires over the past several years, there is little doubt that the U.S. economy — and the country as a whole — experienced its most impressive triumphs when business and government were working together.

In this bureaucratic hog heaven, business and government merrily focused on coordinating the deployment of vast public and private resources for the maximum benefit of the country as a whole — and, in the process, outperformed other nations.

Claiming anything else as the core source of the United States' economic strength of the half-century from roughly 1932 to 1981 is to deny the sources of America's historic success. That is not something conservatives are usually inclined to do.

Without a doubt, government did overreach. But so did the corporations, which are far from the 'lean and mean' machines they are held out to be. Their internal bureaucracies made them downright sclerotic.

The real source of America's strength was not rooted so much in 'optimism' than the ability of the private and public sector to get things done by working together — not at cross purposes.

Cynicism, partisanship and gridlock

In a more resource-constrained era, one which is also characterized by a much broader distribution of political-economic power around the globe, it is crucial to use both sides of the economic equation — the private and the public. This is all the more true given the highly complex nature of today's global economy.

The U.S. healthcare system, for example, is not in grave trouble because of a vast government overreach — contrary to the moaning of conservative critics. Rather, it is in dire straits because providers, mostly in the private sector, are not keen to operate efficiently.

The half century from the early 1930s to the early 1980s was marked by the triumph of the vast machinery of American government.

Meanwhile, the government — read: the Obama Administration — has fallen short of what it set out to accomplish (i.e., to cut the long-term cost of health care). It failed in this mission largely because it did not force the hand of these powerful players to guarantee affordable health care.

That may be perplexing to American conservatives. But only if government pushes the private sector harder will runaway healthcare costs become a thing of the past.

Not so long ago, Americans were widely considered master coalition builders. As a people, they were the envy of the world because they seemed so naturally gifted in aligning vastly disparate interests and arranging them in such a way that everybody came out ahead.

Unlike, say, in Europe or Japan at the time, in America, considerations of social status or deliberations about political propriety or ideology rarely triumphed over the joint pragmatic striving for efficiency and economic advantage.

Tell that to anyone in today's Washington, or the United States as a whole. These days, outright cynicism and entrenched partisanship and gridlock is the order of the day. That, however, is no way to right the listing ship that is the United States. Denial of the sources of one's own success is a denial of one's own roots.

To coincide with the annual conference of the Council on the United States and Italy in Venice, The Globalist is featuring two essays by the Italian-American economist Luigi Zingales on June 7 and 8:

A 21st Century Italian Immigrant to America

Pope Silvio the Illicit: Nepotism, Berlusconi and the Catholic Church