Has the United States, by Virtue of Its Size and Complexity, Become Ungovernable?—Posner

There are, especially in Europe and East Asia, and to a limited extent in the Western Hemisphere, small countries that are well governed. But among large, populous countries, there appears to be only one well-governed country: Germany. The United States is the third largest country by land mass (after Russia and Canada) and population (after India and China), the wealthiest, the militarily most powerful, and generally regarded as the leading nation in the world—its geopolitical center. But all these are negatives from the standpoint of governance, as are the nation’s ethnic and cultural diversity, political divisiveness, high crime rates, and highly unequal distribution of income. Another major negative is the difficulty of changing the U.S. Constitution. Although there have been a number of amendments, the basic structure, set by the original Constitution of 1789, has not been changed significantly.

A serious problem of governance, or management, that all but the smallest organizations, whether private or governmental, encounter is the tension between the goals of the organization and the personal goals, which typically differ, of the individuals who comprise the organization. Stated differently, the individuals have personal utility functions that differ from the organization’s utility function. The larger the organization, the greater the divergence is likely to be and the more difficult to minimize. The organization that is the federal government of the United States has more than 4 million employees. 

Competition between organizations is an important control on the divergence (which economists refer to as “agency costs”—the costs created by the fact that the employees of an organization have their own goals that often conflict with those of their employer). But nations do not feel the same competitive pressures as corporations. Even a small, miserable, effectively bankrupt nation like Greece does not disappear, as large corporations not infrequently do, because of its inefficiency. Because corporations are simpler and smaller and also more constrained by competition than nations, we can expect them to be managed more efficiently, and specifically to adopt an organizational structure that minimizes agency costs. So let’s glance at the structure of the typical large corporation and compare it to our federal government structure. There will be a board of directors to exercise a general but loose supervision over the corporation (and in turn subject to very loose control by the shareholders), intervening decisively only in crisis situations or where there is vacancy in the office of the Chief Executive Officer. The CEO will be the dominant figure in the corporation, exercising something close to dictatorial power, assisted by a small personal staff. Often he will overshadow the chairman of the board of directors—he may even double as chairman and CEO. There will be a Chief Operating Officer, exercising day to day management, while the CEO, as the public face of the corporation, will formulate policy, provide overall guidance, inspiration, and “vision,” appoint the major subordinate corporate officials (general counsel, chief information officer, chief financial officer, etc.), and maintain personal relations with important investors, customers, competitors, and regulatory officials. The corporation will have several or many operating divisions, reporting to the COO or CEO, each headed by a vice president or equivalent. The employees in each division will serve at the pleasure of their superiors; no one will have fixed tenure. 

Compare the federal government. The closest to a board of directors is the Congress, but it differs mainly in having a good deal of policy responsibility, and, since it does not appoint and is not appointed by the President (corresponding to a corporate CEO), there is no presumption that its policy preferences will coincide with the President’s. The President’s exercise of his own policymaking powers will often work at cross-purposes with Congress’s exercise of its powers; nor can he appoint senior officials without the concurrence of a division of the Congress, namely the Senate. A further dilution of presidential power results form the existence of an independent federal judiciary, headed by the Supreme Court. Federal judges and Justices have lifetime tenure, can invalidate legislative and executive action both federal and state, and rarely (because of that tenure) will a President be able to appoint a majority of the Supreme Court Justices or other federal judges. 

The President has a personal staff (officially the “Executive Office of the President”) that numbers more than 2000. The staff assists him in overseeing the large number of “divisions” (executive departments, such as State and Defense and free-standing agencies such as the Environmental Protection Agency) into which the federal government is divided. The heads of these divisions, however, do not have hiring or firing authority, as a practical matter, over most of the employees, who are tenured civil servants. The heads serve short terms, and often are appointed for political reasons unrelated to experience or competence. The brevity of their terms and frequent lack of relevant skills or knowledge create tense relations with the tenured bureaucrats. As a result, the President’s control over the more than 4 million federal employees (of whom about 40 percent are military) is as a practical matter quite limited. 

A further division of government is brought about by federalism: the division of the nation into 50 states, each with quasi-sovereign powers. The federal government has considerable power over the states, but far less than a CEO or COO would have over the operating divisions of their corporation. 

The structure of the federal government reflects the state of the nation in the eighteenth century. The population was roughly 1 percent of what it is today, there were only 13 states and as a result the Congress was small, and the federal government was tiny. It is doubtful that starting over in today’s circumstances a constitutional convention would create a similar system. 

The most glaring deficiency is the limited authority of the President and the absence of an official corresponding to the Chief Operating Officer of a private corporation. From an efficiency standpoint the President should be able to promulgate laws (not just regulations), subject to override by supermajorities of Congress; appoint subordinate officials without the concurrence of the Senate; and create a position analogous to that of a COO; this would result in a structure analogous to that of France, which has both a President and a prime minister, the latter being in charge of day to day governmental operations (though France is not an example of a well-governed country). The President should also be authorized to control the finances of the states, alter their boundaries, appoint their principal officials, and veto their laws. And no civil servants should have tenure. The result of all these changes would be to conform American government to the “government” of a large private corporation. 

Maybe the President would become the “outside” partner and his Chief Operating Officer the “inside” partner, the former dealing with relations with foreign countries (in the broadest sense, comprehending not only foreign relations in the conventional sense, but also immigration, trade, and military assistance and intervention), the latter with the formulation and implementation of domestic policies. 

Of course these are not feasible reforms. Anything that strengthens the President weakens other sources of power, not only in the government itself (legislators, civil servants) but also in the private sector, which through campaign donations and other forms of political activity exert a powerful and self-interested influence on governmental action, resulting in enormous waste and perversity. 

In an interesting and ominous book by Joseph A. Tainter called The Collapse of Complex Societies (1988), the author points to historical episodes of collapse of societies that had become too complex to manage effectively, such as the Mayan civilization of Central American and the Western Roman Empire. Successful societies, such as Britain, the United States, and Germany, in the nineteenth century, and Japan and the Soviet Union in roughly the first half of the twentieth century, tend, like successful companies, to expand. Expansion makes governance more complex, which can lead to ungovernability and eventual collapse. Companies that become ungovernable can shrink to a manageable size by selling off parts of themselves; or they can simply liquidate, in which event their assets are sold to other companies. There are examples in the government sphere, as in the peaceful division of Czechoslovakia into Slovakia and the Czech Republic, or the peaceful dissolution of the Soviet Union, but more often such fragmentation is involuntary, often indeed violent.

Comments

[Mattnotda]

I have an idea. Since there is no way a large federal government can govern a nation of 315,000,000 people spread across 3,79,000 square miles, lets devise a system where the federal government is primarily responsible for defense, international trade and affairs, protecting rights, minting currency, and making sure states don't put up trade barriers. In fact, let's explicitly ban the federal government from doing anything else. Let's relegate all other such power to these individual entities called states, each of which will contain far less land, and far less population than the nation as a whole!!!!

Oh wait; I guess that's what the constitution was supposed to do.

[Mattnotda]

3,790,000 square miles. Typo.

[B Wilds]

The large number of government programs that have failed to carry out their duties and the dim view many Americans have towards Washington may be starting to take its toll on those who think big government is the answer. The Democratic Party has long been thought of as the party of "big government" filled with believers that government can solve and is the answer to curing many of our woes. Sadly cost and reality are quickly beginning to show the flaws in this theory, government is far better at providing access of citizens and good at passing popular laws, but the private sector tends to be more efficient and better at controlling costs. More on the subject of the "flawed concept of big government" in the post below,

http://brucewilds.blogspot.com/2013/11/flaws-in-big-government-concept.html

[Neilehat]

I find the comparative analysis of Corporation's and National Government's organizational structure, development and ends a bit quixotic. To me it's more like trying to compare Apples and Oranges. If I remember correctly, Aristotle made an analysis of various methods of Political organization from Dictatorships on one end of the spectrum to Anarchy on the other end and in the end opted for an Aristocracy as the "best" method of organization. Something the Founding Fathers found odious and ended up saddling us with a Democractic Republic. But in the end, that organizational document called the Constitution is not cast in stone it's merely a scrap of paper and we must recognize it as such. Much like the Founders did when they first wrote it in response to the conditions and temper of their times. If we don't, we're going to end up like the infamous Dodo Bird...

[Jack]

I guess I'd have to back into this one by asking "What else do you suggest?"

In the early days of our nation surely the (small) states had more autonomy. But then came war and the need to through in together. Then the slavery issue that surely violated our 75 year old Constitution. Suppose the decision had been "two America's?" Anyone here think that would have turned out better?

Then BIG war, that required big money and the draft. And the Depression. Could any of the hardest hit states have worked their way out? With "less bureaucracy?" "more efficiency?"

Then the biggest war of all with the necessarily biggest bureaucracy in history.

Next? States opting NOT to live by our Constitution? States that could not, or would not "afford" to provide the education that, WE as a nation was committed to provide.

See the pattern? More Fed bureaucracy to protect states that would not be able to protect themselves, and IF we're going to work that closely together with freedom of labor to travel, and a shared Treasury, it's only the Fed Gov that can insist on those of the "poor states" providing a basic level of education so as not to drag down the whole nation.

Does anyone today really "wish" LBJ hadn't passed the Voting Rights Act? or that Nixon was silly for implementing the EPA? or that we'd rather not have the ICC checking trucking safety, and more? or, with rivers (and effluent) running through many states just skip the Water Quality bureaucracy?

So, just as the EU is experiencing its birthing and adolescent pains of creating, out of many, a ONE, we'd devolve in the other direction? To create what? More "freedom" for states? On social issues like abortion? race? Or, ha! as we see, banking with the credit card industry consolidating in the states with the LEAST consumer protection?

A, hopefully, "peaceful dissolution?" Then what? Voluntary membership in something like the UN to settle inter-state squabbles and rivalries? Could, would OK exact such highway taxes that trucks would have to circumvent that centrally located state? That states on the MS do the same on "our" piece of river that we'll pollute as we see fit?

How 'bout this "company vs state or fed bureaucracy" stuff? Be it a fashion shoe mfg'er or a sports team, if you're not on top of your game you soon become an also-ran and not long after "once ran".

Fortunately the task of our nation and state is not that of being at the leading edge. Instead it's more like building and maintaining the field upon which fast moving athletes compete or being sure the shoe mfg'er has an off ramp or, these days a port to facilitate delivery. In most areas the Fed and state can afford to be slow moving and even a bit bumbling. If, as is the case, we're $2 Trillion behind on maintaining roads, bridges and other necessary infrastructure, well, it is a drag, but! fast moving biz guys will "find a way".

Lastly, the other week, we wrestled with "efficiency". At times, like say the Downhill Ski race at the Olympics, it takes every gram of "efficiency" to get their a hundreth of a sec faster than the Silver winner. But mostly? Not so much. Just recently a consultant insisted a company turn of its internal email; completely. What happened? Employees found the liked walking down the hall to talk directly and it appears they solved problems faster than pumping emails back and forth. In conclusion it seems that while we might aspire to more efficiency, some things just don't lend themselves to wringing out that last drop of "inefficiency".

I've read books suggesting alliances by geographic region like "The Northwest" But as clumsy as it often is, doesn't our representative system do that and more? That Reps realize a fisheries alliance might include AK,MA,LA, and WA? Or on the next day the Alaska Rep is caucusing with the OK, TX, CA, LA and other big oil states?
So it is. We've moved from the slide rule days to the soon to come quantum computers and booms and depressions w/o anything like a corresponding change in the "playing field" and will likely continue to "bumble" along.

Ha! Then there was the late Kurt Vonnegut who used to pack up his manuscript and enjoy walking down to the PO to mail it, even as he had far more time efficient means of doing so. The author, who wrote mostly while still in bed opined that "man was meant to spend much of his time screwing around".

[Terry Bennett]

The question posed is whether we are ungovernable. Obviously we are still getting governed. There are tiny pockets of lawlessness, and some regulations get flaunted for a time, but there is enough enforcement to compel at least some measure of compliance from most people. E.g., a speed limit of 65 doesn't keep everybody at 65, but it does make almost everybody think twice about going 100.

We are not, however, governed with anything approaching the efficiency available via current technology. We could be governed much more effectively and much less expensively, but it would require modernization of our thinking. There are two obstacles to this - one is that the current force of civil servants actually doing the work don't have the tech chops to make it happen, and the second is that deep down people don't really want the government to be too good at what it does, because they don't really like what it does. Maybe in a generation we'll have replaced the old guard of bureaucrats with tech-comfortable individuals, but it remains to be seen whether their attitudes will change as they age, and suspicion of government will eclipse any interest they have in improving efficiency.

[Neilehat]

Jack, Ahh... yes, the technology fix for governmental organization, ends and action. I still use a slide rule (mine's circular) to back check CAD and CAE calculations. If both come within an allowable tolerance I know the Computer answer is correct. I remember one instance when we had some EIT's doing design by computer and having to walk down to the Comp. Room and ask, "What formula's and data tables is that software using"? The response, "We don't know, we input the data and the Computer provides the answer". "Well, you better find out - because the answers are coming out wrong" and this was after two days of running the calc's by hand via slide rule. Good thing we did too, otherwise that plant would have blown up and scattered debris all over the East Coast.

Ahh... Yes, "All watched over by Machines of Loving Grace" once again... ;)

[Jdwalton]

Mattnotda -- "enumerated powers" -- only they can't count. I didn't ever think I would become a libertarian until OSHA took a tour of our plant and told us we had to move the eye-wash station 18 inches.

[Jack]

Neil --- I worked as computer programmer and analyst and did much the same..... perhaps the first debugging would be that of spotting a decimal point error, and then flushing some known quantities and answers through the thing -- high, low or mid-range.

It may well be good to teach slide rule or at least similar thinking. In these policy discussions it seems common that once something is divorced from home budget magnitudes or tops a million, that the sense of proportion is completely lost.

Speaking of which, have most compared our $500 Billion plus defense (now "pre-emptively" offensive) budget to less than a one million troop military for a cost of Half a Million per troop? With over 15 support troops for each forward deployed.

[Sequel]

I can't quite agree that the US is ungovernable, but your recommendation that the Executive be able to void state laws strikes opposing chords for me. There is no doubt that states have entered a new era of passing laws that violate federal supremacy, apparently on the theory that by encouraging other states to act similarly, they will force a federal retreat on an issue that should not even have to ascend to the SCOTUS.

On the other hand, expanding the Executive's power at this level sounds like an excellent way to turbo-charge another trend that is at least as new and troubling as the state problem --Congress' tendency to do the same thing as the states ... which in turn has created a super-judiciary that acts as arbiter between the Judiciary and the Executive, and that doesn't appear to like that role.

[Neilehat]

Jd, Someone should have checked the Standards and Spec's on Eyewash Sta.'s before installing it. Clearly it was outside the allowable radius from the hazard. There is a reason for Standards and Spec's and the requirement for enforcement. But I won't go into the details of it all... ;)

Sequel, That's why SCOTUS exists. Too Referee the "Power Struggles" between Congress and the Executive or the "Power Struggles" between the FED. and the States. There is also the Extra-legal or Extra-Judicial approach like Washington had to use in the "Whiskey Rebellion and Lincoln had to use on various Seccesionists. Or Roosevelt on various Corporate Executives at the startup of WWII... ;)

[Thomas Rekdal]

Whether the American nation is ungovernable depends, I suppose, on what you want the government to accomplish.

If your expectations include a more "equal" distribution of wealth, a more "rational" tax code, a more "efficient" regulation of the economy, and a more "scientific" approach to climate control, then, yes, the structure of American government makes it highly likely that it will produce a nation "ungovernable" in all these respects.

On the other hand, if you believe that the scope of what we know is very small, and the range of unintended adverse consequences very large, an "ungovernable" nation may be exactly the ticket.

The only generalization most of us could probably agree upon is that the more tasks government undertakes, the more interests will be mobilized to affect the outcome, and the more dismaying the ensuing outcome is likely to be.

[Jack]

Thom: Thanks for trying to bring consensus, and to be sure there ARE some who favor the soaring inequality of wage/wealth distribution to continue apace as we ARE curious to know just how much consolidation our economy can withstand before imploding once again.

Surely, as tax day comes nigh, there ARE lots of CPA's and those with enough wage-wealth to hire them who appreciate the irrational complexity of the ever-changing tax c o d e.

On climate change, and perhaps for we Alaskans the even MORE immediate problem of Ocean Acidification there still ARE those complacently sipping their way through a six-pack who are, perhaps, BOTH unknowing and uncaring of the dire problem you bring forth.

Are you a big fan of a capitalism and "the market" that waddles greedily on w/o properly pricing its externalities?

I can certainly go along with much of your last, and perhaps never more than when the Spoiled Twit "got in" and arrogantly ignored advice to watch A-Q closely along with the advice that the surpluses inherited would not support a major tax break for the wealthy sponsors and pals and that one more attempt at "trickle down" would be just as ineffective as at other times in history.

Agreed too! that the "decider" plural I suppose if you count the workings of Darth Cheney really made a mess of his vengeance seeking "preemptive" attack on the recently disarmed Iraq on the greatly flawed basis of cooked CIA books and LIES from all quarters that has cost us SO many lives of our brave and decent troops along with a Trillion bucks added to the debt -- give or give 50 - 100% for the Pentagon's "difficulty" with accepted accounting principles.

In closing, I wonder if you've "market based??" suggestions as to what we should do (or not do?) with the increasing numbers of working folk falling well below the poverty line in this, "on average" richest of nations? Thanks in advance for any thoughtful consideration you might give to what appears to be a worrisome trend and one we KNOW will not be addressed by "the market".

[Sequel]

Neilehat: I think you're overlooking something that has really changed in recent years. The past few terms have been notable for SCOTUS excoriation of Congress. Last term, the Court actually granted standing to a minority group of Congress-folk who brought suit -- at taxpayer expense -- when the Executive branch refused to defend a law that lower courts had found unconstitutional. Clearly, the Court's role in resolving an issue that Congress and the White House could not was consistent with their assigned role, but the Congress was acting in a new capacity by forcing upon the SCOTUS a new role as referee on issues that don't even involve legislation, but merely political spats.

As a liberal, I virtually never agree with Scalia on the face of social issues, but I completely concurred with him that the Court's decision to grant standing in this case was "jaw-dropping".

[Thomas Rekdal]

Jack, I could not agree more that "the market" regularly fails to "internalize" all of the costs its "externalities" generate. My skepticism about streamlining governmental structures to deal with them is not based upon faith in any outcomes "the market" produces, but lack of faith in what we know. What we know is very little; what we can screw up is very large. The bigger the government, the bigger the mess. As Mark Twain once said, it ain't what you know that gets you in trouble; it's what you think you know that ain't so.

The question you raise about the working poor and the long-term unemployed does bother me a good deal. My crystal ball is especially cloudy here, because I have no idea where technology and globalization will take us. If we really are headed to a future in which a tiny fraction of the population produce most of the goods and services, leaving the rest of us as superfluous consumers, some sort of tax-supported basic income does seem to be inevitable. Posner hinted at this in an earlier post about Bismarck's welfare state policies. I would not expect this to come about without a lot of social disruption, but I am rather complacent about that as well.

[Jack]

Thomas: Despite the occasional "occupy" or "fast food workers hit the streets" headlines it seems complacency to the point of being comatose is the marker of our era.

Not sure why folks are being so tolerant but I suppose some combo of being beaten down, or even the few boomers who once were fire-brands no longer having energy for battle and they young not being ready yet or blindly unaware of the screwing they're getting all contribute to the soaring inequity that IS a major drag on the entire economy ------ of the world.

In a nation that voices devotion to a real or imagined Puritan work ethic until, at least, a nice juicy gig appears, it WILL be difficult to adjust to a long era of structural unemployment or yet wider gaps between the haves and those either doing the work for a sub-living wage or not in the economy at all.

Truth is..... we're not that close to running out of work, but trouble is "we" don't want to pay for those saintly folks who care for the elderly or disabled. Ha! in fact "we" don't even want to honestly address some $2 trillion on long neglected infrastructure maintenance or the upgrades that that would benefit all from biz guy to commuter or tourists bringing money from abroad.

Your remarks about a "welfare" state remind me of Nixon suggesting a negative income tax.

IF........ we are A. A wealthy nation and B. one with a structural unemployment problem, it does seem one realistic approach is that of paying some amount to those opting not to work or not able to join the working economy. Sort of raise the floor? and offer some a chance to swap a mediocre income for the free time to pursue arts or work on a pet invention. Higher pay, would of course be the lure to draw people into the working economy as has always been the case..... but eating and having H/C would no longer be put at risk.

Well........ as we seem to agree the fundamental pressures are there and it's now a question as to whether a series of logical small earth tremors or one huge 10 point one will take place.

[Neilehat]

Sequel, As for SCOTUS, the Legislature and the Executive; an age olde Legal Maxim applies, "The Courts can never make a mistake in Law, because it never was Law". Certain cases come to mind, such as, "US v Libellants & Claimants of the Schooner Armistead", "Prigg v Pa.", "Strader v Graham", "Dred Scott v Sanford", "Abelman v Booth" to name just a few. After a four year "Power Struggle" these cases were considered "Not Law" and ended up on the Scrap Heap of History. As for SCOTUS, "OOPS"! Which again proves another Maxim, The Law must be stable and consistent, but it must not stand still"...

[Jdwalton]

@neilehat -- the OSHA standards and Ohio plumbing rules conflict and our engineer thought that the local standard was safer. OSHA surrendered on that one, but it cost some legal feels to make them go away.

[David]

First, sorry for the great loss of Prof Becker.

1. The current system has a feedback loop. During the Great Depression voter turnout was high. If the electorate starts to share the views that our system doesn't work, it will turn out and vote for people with extremist views to change the current system.

2. Hobbes: anarchy is awful. Locke: tyranny is pretty bad too. 20th century provides us with reminders of efficient regime we don't desire to emulate.

3. No data suggests any assumptions in this piece are true. People are risking death and prison to come to U.S. illegally. When things really suck, emigration will exceed immigration. The very numbers of bureaucrats and technology changes cited allows Fed. govt. to do much more across a wide territory and large populace. State and local governments are coopted with cash: eg., pass state laws creating state sex offender registries or drunk driving laws or lose fed dollars. If anything, there is way too much fed.power these days, not way too little.

4. Creating a presidential dictator will destroy the Republic. Judge, please reread Cicero. Or, if you're feeling lazy, watch star wars (the last film made) The efficiencies you seek will kill the goose lays the eggs.