Governor Granholm has now completed her second statewide tour seeking suggestions for specific cuts to eliminate the projected $920 million deficit from next year’s state budget. But this is a piecemeal, patchwork approach to a chronic, systemic problem.
Perhaps the reason the governor has turned to the common folk for proposals is that she has simply been consulting the wrong kinds of experts. Given the nature of government as an institution she probably ought to talk to an ecologist.
Government is very much like an ecosystem – a closed macrocosm with exclusive control over a geographic area. Both governments and ecosystems are in essence vertically- and horizontally-integrated monopolies. Neither affords escape to some alternative, should we destabilize the only one we have.
So how does nature manage to keep consumption and resources so wonderfully in balance?
In a word: predators.
Any environmental expert can predict the fate of an ecosystem without predators. There is an inevitable population explosion among grazing animals – which will consume and reproduce and then consume even more. This process will continue until food shortages cause a massive famine, followed by a catastrophic collapse.
We nearly experienced this very phenomenon right here in the fields and forests of our pleasant peninsulas in the last century when all the wolves, mountain lions, and nearly all of the coyotes and bears, were driven out. The deer population skyrocketed. Everything would have been eaten down to the nub, if not for human hunters filling the niche vacated by wild predators.
Now consider the institution of state government.
It is at root a massive herd of departments, agencies and bureaucracies, leisurely grazing on our tax dollars, limited only by competition with one another over the total resources available to consume.
Our current predicament was inevitable given the implications of the “Public Choice” theory for which James Buchanan and Gordon Tullock won the Nobel prize in economics nearly two decades ago.
The essence of their insight is that individuals employed in the public sector are driven by the same fundamental incentives as their private sector counterparts. While both certainly have their share of altruistic inclination, for neither is the collective good their primary motivator.
All workers are concerned, first, with their own careers. Second, with the prospects for their employer generally. Third, with their own division or department particularly.
Only then does accomplishing whatever task is their putative purpose factor into the equation.
Now apply this dynamic to every department, agency and commission – from Agriculture to Veteran’s Affairs. Each is necessarily dedicated, first and foremost, to protecting and expanding its piece of the turf. Then add in the fact that the only limit to growth is the competition among them over the tax revenue available.
Is it any wonder that government has become the premier growth industry in our society? It is basically an ecosystem without predators.
But there is another, equally important, lesson to be drawn from the natural world.
Predators do more than merely keep the total number of grazers down. They perform a vital additional function in that they cull selectively. Instead of being indiscriminate, like a famine (government equivalent: “across-the-board cuts”), they preferentially remove the old, the weak, the diseased – the no longer useful – from the herd. This leaves more resources available for the best and most productive to thrive.
At the risk of committing libertarian blasphemy, I think what we really need here is a new agency in state government.
Call it, perhaps, the Department of Cost-effectiveness.
Give this new agency broad subpoena powers to require production of documents and testimony from anywhere within state government. Give it the power to seek and compensate anonymous tips from whistleblowers. Then allow it to roam freely over the government landscape, developing proposals for the legislature: to cut any line item, department, or even entire agency, from future expenditures.
This new agency would, of course, require start-up funding. But it would be vital to phase that out as quickly as possible – with future funding generated exclusively by allowing it to retain, say, 10% of all the money its adopted proposals save.
Even if the Department of Cost-effectiveness only managed to reduce state spending a paltry 1%, such a self-supporting agency would (based on current figures) have a $36 million annual budget. And more important, a powerful and direct incentive to do a better job the following year of finding even more unproductive expenditures to propose for thinning.
Instead of periodic treks around the state asking citizens to make ad hoc suggestions for expenditures to eliminate, the governor should propose a new state agency to permanently fill that currently empty niche.
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Published as A governmental ecosystem in the December 11, 2003 edition of the Detroit Free Press
More on spending:
- The Peace dividend
- Throwing our money down a rabbit hole
- Government as venture capitalist
- A priori education
- Michigan’s Titanic business climate
- Downtown Disaster Areas
- Balancing the federal budget
- Down the sewer
