By Walter Russell Mead
Slate’s Matt Ygelsias is trying
to start a small business by renting out a condo, and he’s finding out just how
hard the blue model is on entrepreneurs. After detailing his personal
battle with the DC bureaucracy for a single basic business license, travelling
from office to office, filling out form after form, and losing precious time
and money, Ygelsias reflects more broadly on the harms of red-tape
hoop jumping:
Not that I expect your pity. I don’t even pity
myself. Going through the process, I mostly felt lucky to be a
fluent-English-speaking college graduate with a flexible work schedule. But the
presence of a stray pamphlet offering translation into Spanish, Chinese, or
Amharic seemed like it would be only marginally useful to an immigrant
entrepreneur. A person who needs to be at her day job from 9 to 5 would have a
huge problem even getting to these offices while they’re open …
Red tape, long lines, inconvenient office hours,
and other logistical hassles probably won’t stop tomorrow’s super-genius from
launching the next great billion-dollar company. But it’s a large and needless
deterrent to the formation of the humble workaday firms that for many people
are a path to autonomy and prosperity.
Here the liberal
columnist encounters some basic truths we keep pounding home at VM. Heavy
regulation plus bad governance hurts the poor and prevents jobs from being
created in big blue cities where so many immigrants and minorities live. Those
are exactly the people who most need the freedom to start businesses, and those
are the businesses our existing blue model cities do so much to crush.
Many of these
regulations and bureaucratic obstacles, moreover, serve no social purpose.
As Yglesias’ experience shows, the move for government reform does not
need to be an ideological or partisan issue: liberals should fight pointless,
expensive, poor-exploiting and opportunity-killing regulation as hard as
conservatives.
But it has, to some
degree, become a partisan issue because upper middle class progressive
intellectuals often know nothing about the real effect of the regulations they
do so much to promote. The reason for this is simple: they are almost never in
the position of running businesses. Without a grounding in how things actually
work, our brilliantly educated lawyers and policy wonks and professors and
pundits develop complex regulatory structures and systems that have unexpected
impacts and unpredictable but very damaging side effects. They erect regulatory
barriers with the same arrogant disregard for complex social systems that the
Army Corps of Engineers exhibited toward natural ecosystems when the Corps was
in the business of damming every river and paving every stream bed it could
find. The environmental movement arose in reaction to arrogant bureaucratic
technocrats; that same feeling is one of the wellsprings of the anti-regulatory
movements of our time.
But the empire fights
back. While the regulations that slowed down Yglesias’ quest to rent out a
condo don’t help tenants in any way, they do help the people who have jobs
administering them. Reforming these systems is difficult because entrenched
interests—often public sector unions and big city political machines eager to
find job slots that can go to deserving supporters—so warp the politics of the
Democratic Party that it becomes a lobbying group for the producers of
government services.
Political machines and
unions aren’t the only forces holding up the pointless hoops Yglesias had to
jump through: existing businesses often use tough regulatory regimes as a way
to keep new competitors out of the market. Complicated administrative
procedures serve as a barrier to entry, helping to make it possible for
established businesses to charge higher prices. (Often, new regulations come
with “grandfather” clauses that exempt existing facilities or operations from
some of the most onerous features—another way in which existing interests use
the regulatory state to fight off competition.) When well lawyered and well
moneyed existing interests succeed in this effort (which is more often than
not) the regulations end up hurting exactly the people—consumers—they were
ostensibly intended to help. In one-party jurisdictions like DC, what you then
get is a sick symbiosis between a business establishment that welcomes certain
obstructionist regulations (and tolerates their byzantine enforcement and
operation by large and incompetent bureaucracies) and political machines. Both
welcome regulation, but neither is particularly interested in effective or fair
regulation.
Many college students
and academics like to think that the reason that these populations are often
more liberal than the average American is that they are smarter and better
educated. Yglesias’ experience with the deeply dysfunctional Washington DC
bureaucracy and the shock and surprise his column expresses at
this experience suggests another explanation: that progressive
intellectuals, like academics, have less experience with the real world than
other people, and don’t understand the social consequences and costs of the
measures they so naively and impractically think will make life better for all.
(UPDATE: Yglesias himself has made these points before and we don’t want to
accuse him of ignoring the problem; but ignorance of the costs of blue
governance is widespread among many of the blue model’s most enthusiastic
backers.)
None of this means that
we need to designate Ayn Rand the Minister of Commerce in Washington DC; but it
does suggest that the transformation of governance is as urgent an issue today
was it was when the Progressive Movement first sought to adapt American
governance to the industrial age. A lighter, smarter state is better for the
poor than a clumsy behemoth that strangles entrepreneurship, raises costs and
favors existing interests. Somehow, though, it is considered a sign of being on
the radical right fringe to point things like this out—just as it’s considered
right wing and borderline racist to be filled with rage at the corrupt one
party political machines that exploit, strangle, miseducate and otherwise cheat
the poor in cities across this great nation.
At Via Meadia we call this kind
of acquiescent, unreflective stand-pat liberalism “4.0.” It is a defensive
ideology, tied to the preservation of an outdated status quo. It has high
ideals and it is grounded in a genuinely progressive and positive social
vision, but over the decades it has become less and less suitable as a guide
for America’s future. America owes a lot to 4.0; Social Security, civil rights,
mass access to higher ed and the list goes on.
But its best days are
past. These days, too many “liberals” are baby-loathing bathwater hoarders. A
powerful faction of the Democratic Party thinks it’s more important to preserve
education bureaucracies and life tenure for bad teachers than to help poor kids
get a good education. It is the poor, not the modern equivalent of Tammany
Hall, whose interests the enlightened should defend. It is the future, not the
past, that a pro-middle class American political movement should serve. It is
the inner city entrepreneur, not the political machine we should care about.
There are plenty of
people on the liberal Democratic side of politics who understand these
realities, and as we’ve observed before especially on the school choice issue
we’ve seen something approaching bipartisanship. But there is much more to be
done.
Back when the
Progressive movement, for all its faults and limits, really did represent the
logical path forward for the United States, there were both Republican and
Democratic versions of competing progressive visions. Back in the 1950s and
1960s, Republicans and Democrats both embraced some basic aspects of the New
Deal state while giving competing ideas about how to administer, develop and
restrict that state. Today, unfortunately, too many Democrats are bound to an
outdated version of progressive ideology, while too many Republicans have
jumped back even farther in time, arguing for a kind of pre-progressive 1890s
style laissez-faire.
Matt Yglesias is a smart
guy. We hope that his brief encounter with the overbuilt and underperforming
reality of American blue governance will inspire the kind of reflection that
can help this country develop policies and institutions that work.
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