Jonathan Rauch defines "demosclerosis" as "government's progressive loss of the ability to adapt." In this sharp and carefully-argued analysis, he describes it as a side-effect of the postwar style of politics that emphasizes interest-group activism and redistributive programs. The dramatic rise of interest-groups coupled with the public's increasing demands on government, he says, have produced in "an escalating game of beggar-thy-neighbor that damages the economy and chokes the government." Today demosclerosis represents the most serious threat to the long-term vitality of American government.
Rauch's principal argument is based on the work of economist Mancur Olson. Elaborating on the classic game theory of political economy, Olson showed that rational individuals acting in their own best interests fail to achieve their common or group interests. Olson refuted the widespread presumption that special interests — or "pluralism" as it was more commonly called in the 1950s and 60s — was the unique strength of American democracy. The sum of all the group interests in a pluralist system, he argued, does not equal the general interest. Moreover, the larger the group of people to benefit from some collective action, the weaker the incentive for any particular beneficiary to join or organize the effort. "In other words," Olson wrote, "the larger the group, the less it will further its common interests."
In a stable, democratic society, pressure groups inevitably form to persuade government to redistribute resources their way, Olson argued. Taken one at a time, these benefits have practically no effect on society as a whole, so no countervailing group arises to stop the waste. But, taken as a whole, group demands gradually sap the effectiveness and flexibility of government to the point where no program can be cut and no subsidy eliminated without arousing vehement opposition from some group or another. As the number of interest- groups in a society increases, and as the benefits secured by groups accumulate, the economy rigidifies. By locking out competition and locking in subsidies, interest-groups capture resources that could be put to better use elsewhere. Furthermore, as interest-groups and their perks and deals add up, so do laws and regulations and, by extension, the number of people who administer the laws and regulations.
"Twenty years ago, an intelligent observer of politics could have dismissed Olson's ideas," Rauch says, "but in today's Washington you need to be a tree frog not to notice hints, traces, even outright demonstrations of Olsonian forces at work." While the number of interest-groups and lobbyists in Washington have soared, so too have the number of federal subsidies, public entitlements, tax loopholes and protective trade measures. Since political lobbies do not produce wealth, only redistribute it, their mission is to persuade the federal government to move resources and tax advantages from one part of the economy to another, frequently at someone else's expense. Interest-groups also work to protect federal programs, subsidies, and tax breaks that are already in place so that cutting the federal budget becomes exceedingly difficult, despite widespread public support. As Rauch points out, "it is scarcely an exaggeration to say that, in Washington, every program lasts forever." Under these conditions, it becomes practically impossible for the government to experiment with new programs because interest-groups mobilize their forces to preserve their version of the status quo.
The problem of interest-groups has little to do with conventional rhetoric about "special interests," according to Rauch. While most Americans feel that they are the victims of interest-group politics, he contends that the public at large has to bear responsibility for the problem. Today seven out of ten Americans belong to at least one organization, and one in four belongs to four or more. As he says, special-interest politics is no longer "special" — it is a mass movement.
"Demosclerosis isn't a problem you solve," Rauch observes. "It's a problem you manage." Moving beyond diagnosis, he offers a number of strategies for cure. For instance, he recommends a zero-sum rule to force Congress to eliminate an old program for every new one it adopts. He also advocates the deregulation of large areas of the economy, like agriculture and communications, to force government supplicants to compete strictly on their own merits.
[Note: This book was published in a revised and updated edition in 1999 under the title Government's End: Why Washington Stopped Working]
Copyright 1999 by Scott London. All rights reserved.