Google, Wisconsin, and Distributional Coalitions

Over the past month, Google made waves with the announcement that it has tweaked its search algorithms to penalize ‘content farms.’ These are “low quality sites whose main goal is to attract search traffic by piling up (mostly) useless content.” The lesson from Google is simple: no system devised by the mind of man is immune to being gamed by other men. Google’s merit is that it can respond quickly to thwart the gaming. That will, in turn, breed more gaming, but Google will, if it is attentive, not fall too far behind. If it slacks off, it will quickly be overtaken by a more nimble rival.

The same, unfortunately, is not true of society as a whole. J.E. Dyer argued in Commentary that the battle in Wisconsin represented the crisis of progressivism. But that is not all it represented. It also represented a shot in the battle against the problem that Mancur Olsen identified in his remarkable 1982 work on The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities: the tendency of stable societies to build up special interest groups (or distributional coalitions) that frequently fortify their position with government recognition or funding, and in turn reduce the flexibility and growth of the economy as a whole. Dyer refers to this as the problem of “special-interest activism,” but its implications are broader than the problem of over-spending.

Olsen offered his theory, in part, to explain Britain’s economic underperformance from the late 19th to the late 20th centuries. In my judgment, it remains the single most persuasive work on the subject, superior to several better-known books. But it now seems particularly applicable to the United States, which has over the past 65 years — except during a few interludes — been gamed ever more intensely. The entitlements burden, in Olsen’s terms, is the result of the Baby Boomers — who have become a distributional coalition if there ever was one — defending benefits that, because the costs fall on younger, less attentive, and less numerous voters, for many years raised no outcry.

But precisely because the U.S. has been so stable, we are burdened with many more such coalitions, most of them not explicitly centered on spending, and some supported only indirectly by the state. In academia, the professoriate defends the traditional apprentice system, even though that system is profoundly dysfunctional for the younger generation. In higher education, the elite design the admissions systems at which their children excel, which must over time reduce social mobility. In arms control, as Richard Pearle noted at The Heritage Foundation the week before last, we have an activist cottage industry that appears to be incapable of recognizing how much times have changed since its so-called glory days of the 1970s.

It is not surprising that all of these groups pose as liberal — even radical — while being at the same time deeply conservative in their attachment to the self-serving status quo.

This pose may be a form of compensation, but it is most directly a way of defending their privileged position by making a moral claim about it. It is also not surprising that their ire — recall the claims that America is a ‘frozen democracy,’ or Tom Friedman’s view they do these things better in China — is not infrequently directed at America’s constitutional order, which by separating powers and restraining government has (however incompletely) imposed at least some limits on the special interests.

As I noted in January, America’s cold war grand strategy rested on holding the line through containment, while over the long run playing the strengths of America’s economic flexibility against the rigidity of the Soviet Union’s top-down economy. Reagan’s great merit was to recall America to this strategy after the Johnson-Nixon-Ford-Carter era of big government and self-doubt, and to apply it even more rigorously than it had ever been applied before. It remains America’s true grand strategy today to go for growth, as long as that growth is the result of innovation. In fact, there is no other kind of growth. As Olsen emphasizes, “the best macroeconomic policy is a good microeconomic policy. There is no substitute for a more open and competitive environment.” The failure of Obama’s stimulus testifies to the truth of that observation.

But as the example of the Cold War demonstrates, this is not just a matter of our domestic prosperity, as important as that is. It trenches directly on our power in the world. Olsen quotes Nehru’s Discovery of India, which forthrightly blames India’s decline and fall on “the static nature of Indian society which refused to change in a changing world, for every civilization which resists change declines.” The result in India’s case was conquest first by the Mughals, and then by the British. We are kidding ourselves if we think we can defend all the vested interests we have created in the post-1945 era and at the same time continue to play the worldwide role that has characterized that era. Indeed, the best possible defense of the Obama Administration’s policies is that they have recognized this fact, and have decided to stand for the interests and against the role. That is at least a coherent approach.

The only problem with it is that it will make us both poorer and less free, but, unlike Olsen’s underperforming British, we have no other power to fall back upon to defend our values and interests around the world. Would that our society was as flexible, and as unencumbered by government-backed gaming, as Google’s algorithms.