Economics, Free Enterprise

Civil Society, Entrepreneurs, and the State

The New Republic’s Jon Chait thinks concern about the potential for a one-party state in the Obama era should prompt an embrace of public financing of campaigns and other campaign finance reforms. Arnold Kling isn’t buying it here.

As a solution for the problem of entrenched political power, “public financing” and “tough reforms” are fox-in-charge-of-the-henhouse ideas. Ultimately, campaign reform gives you government of the incumbents, by the incumbents, for the incumbents.

Indeed, my colleague Peter Wallison has a new book out on just this topic called Better Parties, Better Government. Campaign finance restrictions limit competition by restricting the funds available to challengers.

What’s also interesting to consider is Arnold’s bigger point:

The traditional libertarian solution for corrupt government is Constitutional restrictions on government activity. Smaller government means smaller scope for corruption. I am not sure I believe that the traditional libertarian solution works. I suspect that what really makes for limited government is the opportunity for exit. In the early 1800s, it was possible for an American to pick up and move to a remote area where government had very little impact. That possibility tended to limit the power of the central government. I think that the big challenge for libertarians is to create conditions that enable people to exit from overbearing government . . . I think we need to boost the organizations of civil society that compete with government: private schools, private firms, charities, neighborhood associations, and groups that supply public goods using the “open source” model.

This comment reminded me of a speech by Carl Schramm I read recently that discussed the role foundations played in enlarging government during the 20th century and what role foundations might play to bolster civil society today:

In many ways, foundations taught the government how to get bigger. The Rockefeller Foundation and others pioneered the funding of university research. The Kellogg Foundation helped develop the prototype of the community college that became ubiquitous under the sponsorship of local government. And since the Great Society, some foundations have seen their role as designing pilot social-welfare programs that would then be picked up by government. The model still prevails around issues such as national health insurance and childhood obesity, and it is essentially one in which foundations act as the incubators of an ever-expanding network of government benefits.

Affluence and abundance have changed this. The future, for foundations, does not lie in the old mindset of trying to leverage government funding. It lies in finding new ways to leverage the power of entrepreneurial capitalism. Perhaps, then, foundations now need to teach government how to get smaller. We have, with foundations, established enormous pools of private wealth that could be used to create new visions of democracy, new visions of civil society, and new visions of cultural mobility. These would be centered in each case on the bedrock of the individual’s ability to create a meaningful destiny, one where personal responsibility and individual creative authenticity become the defining qualities of each American.

Is it possible to teach government how to get smaller? Arnold is skeptical, but by leveraging entrepreneurial initiative, Schramm is advocating an approach that may yield “new visions of civil society” and seems to be in keeping with what Arnold has in mind.

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