The Deal Economy 2013

Home | Event | Blog | Awards

Print | Share | Discuss | Reprint

Fukuyama's plan to fix Congress

by Robert Teitelman | Published November 30, 2011 at 10:34 AM

On Monday, I posted on the complications underlying the bubbling technocracy versus democracy theme. Today, like an early Thanksgiving treat, Francis Fukuyama in the Financial Times offers up a perfect example of technocratic overreach. Fukuyama, now installed at Stanford's Freeman Spogli Institute, throws his hands up at the inability of Congress to do just about anything on the deficit, and urges the creation of a "democratic dictatorship" -- a fundamental change from Madisonian checks and balances to a British, Westminster model, in which a prime minister normally has a parliamentary majority, allowing him (or her) to do just about what he pleases, as long as he can keep his party with him. "A simple majority plus one in the House of Commons can make or overturn any law of the land, which is why it has sometimes been referred to as a democratic dictatorship."

The U.S. system, built into the Constitution (making this a very big change indeed), is just a total mess, according to Fukuyama, and has been more or less, he implies, since the founding. Presidents announce "aspirational budgets," and individual members of Congress "use their potential veto power to extract concessions. The budget that eventually emerges after months of interest group lobbying is the product not of a coherent government plan, but of horse-trading among individual legislators, who always find it easier to achieve consensus by exchanging spending increases for tax cuts. Hence the permanent bias toward deficits." Fukuyama calls the American system a "vetocracy."

This is a classically technocratic viewpoint. American democracy is paralyzed, it doesn't produce a "coherent" plan, and therefore we must drain away some of the democracy and inject a bit more -- well, quite a bit more -- technocracy. Now no one in their right mind could argue that American politics, notably Congress, isn't a polarized, often-paralyzed, corrupt and craven disaster. On the other hand, this isn't the first time we've experienced that. Moreover, it's also quite clear that Congress' own irresponsibility and greed have erected rules and procedures that make it worse, from the filibuster to the overuse of amendments and holds. Fukuyama is perfectly right to urge that these encrustations be stripped off; and reform of lobbying and campaign finance wouldn't hurt either (though there are deeper problems to be confronted as well: the breakdown of party discipline and the erosion of seniority). Fukuyama does, however, exaggerate the "permanent bias toward deficits" of the Madisonian system. How does he define permanent? Well, he doesn't. Clinton with Congress created a surplus and before Reagan's massive supply-side red ink, administrations back to World War II ran relatively minor occasional Keynesian deficits, usually to spur a slumping economy. Most peacetime administrations and their Congresses have not created deficits: It's really a problem of the last few decades, and it's one anchored not in discretionary spending but entitlement demographics and defense expenditures.

Fukuyama is devoted to the Westminister model, which theoretically can produce a coherent plan but which, in the real world, seems to suffer, like any political mechanism, some stubborn problems. The Cameron coalition in the U.K. has forced through a button-poppingly tight austerity budget, but it seems to have spawned (as many predicted) distress and little growth. And in fact British economic growth -- if that's your metric of success -- has been spotty since World War I. Perhaps in the long run Cameron will prove to be right; and any fair-minded person would agree that you can't blame a legislative structure like Westminster on complex political, social and economic realities. Britain is not America, and neither is China or Italy or Japan. Still, what we can say is that a Westminster model allows a set of currently fashionable or popular ideas, whether in economics or in racial policy or immigration or social policies, to win majority support and become law. It is, in that sense, far more "democratic" than Madison's checks and balances, which were designed to slow things down, to allow greater deliberation and to allow crackpot ideas to fade. As Keynes famously said, "Practical men, who believe themselves to be quite free from intellectual influence, are usually the slaves of some defunct economist." Fukuyama has greater faith in technocrats than I (or for that matter Keynes).

What Fukuyama, like technocrats generally, ignore in his theoretical musings is the engine of a democratic state, whether in Britain or America: the voters, the people, the demos, the general will. What Fukuyama would like to do by imposing a Westminster model on the U.S. is to interpose some group of "responsible" experts between voters and their often-feckless representatives -- a permanent super committee with "heavy technocratic input from a non-partisan agency-like the Congressional Budget Office that would be insulated from interest group pressures that afflict the sitting legislators." (Fukuyama blithely ignores the seemingly ineradicable reality of "regulatory capture" with his philosopher-king-like CBO, as he, in his rational wisdom, seems not to notice the ubiquity of ideological fervor.) Congress as a whole would then get an up-or-down vote. Fukuyama admits that this Westminster scheme will probably never come to pass, but he clearly wants to remove the budget process from the baleful influence of ignorant, corrupt or self-interested voters -- thus his "democratic dictatorship."

Beyond the fact that this Westminster graft is a pipe dream, that's his schemes greatest weakness. By bypassing an electorate that for over two centuries has held some sway (Fukuyama is no Burkean conservative), for good or bad, over the federal budget, he runs the classic risk of all overreaching technocratic schemes, and one that already chronically besets our federal government with its vast agencies and administrative apparatus: a sense of de-legitimacy, a loss of accountability, a feeling that democracy has broken down and that channels for expressing stresses and strains have been blocked. Those feelings drive populist eruptions like the Tea Party or Occupy Wall Street. And for all of China's technocratic triumphs, that lack of democratic legitimation and signaling of social pressures is its greatest weakness and will one day prove a great challenge -- though Fukuyama doesn't believe that U.S. democracy can teach China anything. But for all of our woes, there remains some genius in this very messy Madisonian democracy: We own the damn thing. It's our problem to fix. It's why we hold elections. - Robert Teitelman

Share:

blog comments powered by Disqus

Free preview

This is only a preview of The Deal's sophisticated coverage. Explore the real-time intelligence as researched and reported on by our team of financial journalists with a license to The Deal Pipeline. Click here for more information.

Meet the journalists

Robert Teitelman

Editor in chief

Bob Teitelman, editor in chief and a member of the company’s executive committee, is responsible for editorial operations of print and electronic products. Contact

Movers & Shakers

Ken deRegt will retire as head of fixed income at Morgan Stanley and be replaced by Michael Heaney and Robert Rooney. For other updates launch today's Movers & shakers slideshow.

Video

Coming back for more

Apax Partners offers $1.1 billion for Rue21, the same teenage fashion chain it took public in 2009. More video

Free preview

Editor in chief

Movers & Shakers

Sectors