Bureaucracy as a Root of American Prosperity

It is one thing to be proud of one’s own country’s past. It is quite another to distort that past to support one’s own positions in current political battles.

American history has always had an anti-government streak. However, the half-century from the early 1930s to the early 1980s — which, as it happened, also encompasses the pinnacle of America’s political, economic and military power worldwide — was marked by the opposite: the triumph of the vast machinery of American government.

From space flight to environmental protection, from state-of-the-art infrastructure and medical innovations to the invention of computers and the Internet, what is remarkable about the path of the United States over those five decades is how closely the fortunes of its vast industrial machinery (a.k.a. the private sector) were linked to the government apparatus.

Uncomfortable truths

It may be an uncomfortable truth, but still one well worth recalling, that from the late 1930s onward, the clairvoyant way in which the U.S. government blazed the trail of innovation, societal progress and modernization was actually the envy of the world.

The U.S. federal government placed tremendous financial resources in the hands of a vast number of dedicated civil servants who then pushed the country to the cutting edge of technology and strived for an improved social balance. In the process, they worked alongside American “Big Business,” the world’s largest, best-oiled and best-resourced corps of corporate managers anywhere.

This history underscores a key fallacy in the current U.S. political debate. Conservatives cast government as principally bad and the private sector as inherently good. This is an entirely misleading, ex post facto portrayal of the private sector. The assumption is that corporations, unlike government, are naturally lean, mean and highly efficient. That portrayal has little to do with historical realities.

Big wins

To believe that myth would require suppressing the decades-long record of a U.S. corporate sector getting so bloated that it ultimately became the epitome of a sclerotic bureaucracy.

And it would entail forgetting that corporate America’s in-house bureaucracy, in its sum total, was eventually far larger than that of the entire government apparatus combined. The near-death experiences of IBM and AT&T in the 1980s, and more recently of GM and HP, attest to the reality of private sector bloating in an incontrovertible manner.

True, the past couple of decades has seen the creation of many Internet billionaires. Even so, there is little doubt that the U.S. economy — and the country as a whole — experienced its most impressive triumphs when business and government were working together in the decades prior.

In this bureaucratic hog heaven, business and government merrily focused on coordinating the deployment of vast public and private resources for the maximum benefit of the country as a whole — and, in the process, vastly outperformed other nations.

Claiming anything else as the core source of the United States’ economic strength of the half-century from roughly 1932 to 1981 is to deny the sources of America’s historic success. That is not something conservatives are usually inclined to do.

Without a doubt, the U.S. federal government did overreach. But so did U.S. corporations. They went far beyond the “lean and mean” machines they are held out to be. Their immense internal bureaucracies made them downright sclerotic.

Contrary to the regular mantra, the real source of America’s strength was not rooted so much in “optimism.” Rather, it was the ability of the private and public sector to get things done by working together — not at cross purposes.

Cynicism, partisanship and gridlock

The bewildering fact about today’s America is this. We live in a world now that can be described as a more resource-constrained era and one which is also characterized by a much broader distribution of political-economic power around the globe, it is crucial to use both sides of the economic equation — the private and the public — in order to succeed. This is all the more true given the highly complex nature of today’s global economy.

The rather perverse reality is that the United States has moved away from that model when it matters the most. And it practiced it very successfully back when its resources were less limited and it faced less global competition.

This leads to all sorts of curiosities, distortions and outright falsehoods. Take the U.S. healthcare system, for example. It is not in grave trouble because of a vast government overreach — contrary to the moaning of conservative critics. Rather, it is in dire straits because health care providers, mostly in the private sector, are not keen to operate efficiently.

Meanwhile, the government — read: the Obama Administration — has fallen short of what it set out to accomplish (i.e., to cut the long-term cost of health care). It failed in this mission largely because it did not force the hand of these powerful players to guarantee affordable health care.

The sensible and straightforward solution to this seemingly vexing problem may be perplexing to American conservatives. Only if government pushes the private sector harder will runaway healthcare costs become a thing of the past. That’s what efficiency and true capitalism ought to be about.

A proud past

Not so long ago, Americans were widely considered master coalition builders. As a people, they were the envy of the world because they seemed so naturally gifted in aligning vastly disparate interests and arranging them in such a way that everybody came out ahead.

Unlike, say, in Europe or Japan at the time, in that America considerations of social status or deliberations about political propriety or ideology rarely triumphed over the joint pragmatic striving for efficiency and economic advantage.

Tell that to anyone in today’s Washington, or the United States as a whole. These days, outright cynicism and entrenched partisanship and gridlock is the order of the day. That, however, is no way to right the listing ship that is the United States. Denial of the sources of one’s own success is a denial of one’s own roots.

Editor’s note: This piece was originally published on June 5, 2012. It was updated by the author on June 3, 2014.