In a flourishing economy, the public sector should be as small as possible. But not so small that it cannot prepare and deliver contingency plans.
Does the hapless response of the Bush Administration to the financial crisis–the inability to grasp the scale of the problem, the sheer lack of preparedness and of ready resources to deal with contingencies–remind you of something?
Hurricane Katrina, perhaps? Or post-invasion Iraq?
In each case the government’s response has been essentially the same: a failure to grasp the scale of the disaster together with a dearth of contingency plans.
In the case of Iraq, the CIA’s major concern was ensuring enough US flags were in hand for the welcoming crowds to welcome their “liberators”.
When it came to Katrina, FEMA chief Mike Browne was showered with congratulations from President Bush while an American city was drowning.
Now, with the US investment banking system not only in trouble but actually destroyed, a victim of Wall Street greed condoned by government laissez-faire, we find the authorities flummoxed at the markets’ unwillingness to act on their assurances.
Contingency planning is something we expect of governments. It is one of their primary functions: to plan for the worst. Governments, not private firms, invest in defenses against chemical or nuclear attack or take steps to avert the consequences of climate change.
Unfortunately, the Republican Party discovered, through Ronald Reagan’s success, that attacking, belittling, and demoralising government had the perverse effect of ensuring power: from 1980, the GOP have been adepts of this strategy.
Small government is good, particularly for free-market economies: this truth was at the kernel of the “Reagan Revolution”.
But the public sector should not be shrunk to the extent that it cannot come to the rescue when needed. Nor should public funding be misdirected or cut to the point that there is no Plan B when the best-of-all-possible-outcomes fails to materialize.
For proof you no longer have to ask the people of Baghdad or New Orleans.
Flickr Image by Christian et Cie
A good topic for discussion, and I understand what you are saying. I wonder, however, if there are any circumstance in which the public service should not be “as small as possible”? The key, presumably, is the implied “to achieve the goals set by government,” and it is this that provides the real debate.
My understanding of US Republican ideology is limited but I believe the aim is for government to be as slim as possible, leaving as much power as possible in the hands of the markets and citizens. If you’ll forgive the mixed language, a sort of über-laissez-faire.
The fact that the Bush administration demonstrated such serious failure is the result of some combination of ideological failure and incompetence, on which the electorate subsequently had their say.
Ireland, in contrast to the US, has a massive – and expensive – public service, and still managed spectacular economic failure, the extent of which is, I suspect, still not fully understood by the citizenry.
Ultimately, therefore, perhaps the responsibility for failure should not be carried solely by the government of the day, regardless of the public service (over which the government has control).
Thanks for the comment, Al.
I take your wise point about being careful not to heap all blame on whichever adminstration happens to be in power: a knee-jerk response I have been often guilty of in the past!
In democracies the voters ultimately get the leaders they deserve.
I suppose my original post was borne out of my own conflicted feelings about governments and their agencies: I am, broadly speaking, a supporter of free-markets and firmly believe in the power of trade to help all parties involved. And I also believe public entities are generally inefficient and tend towards bloat and halpessness.
Yet, as I said, there are some catastrophes that only the public sector and their masters can deal with.
The question is if we should have resources held in reserve for such eventualities…and, if so, how much. The Norwegians seem to show the way here: when they had their windfall they built up a large reserve and didn’t allow their lifestyle-spending to run riot as happened in Ireland from the mid-1990s (and the US, arguably, from the mid-1950s).