Friday, June 06, 2014

Government is Special

Guest Blogger

Jon D. Michaels

This post is part of an online symposium discussing Nicholas Parrillo, Against the Profit Motive: The Salary Revolution in American Government, 1780-1940 (Yale University Press 2013).

One of the ways a non-historian can pay homage to great historical scholarship is to mark and celebrate its contemporary relevance.  Nicholas Parrillo’s new book, Against the Profit Motive, makes this job easy.  Though Parrillo devotes just a few short pages to today’s “renewed” passion for business-like government, his story of America’s earlier dalliances with business-like government helps us see current patterns and practices in a new, richer light.  It also brings into relief some insights and intuitions that we have seemingly forgotten.

In this symposium contribution, I explain how today’s business-like government agenda is a direct response to (and critique of) the various ways government has, beginning with the salarization revolution, marked itself as different and special.  I then explain how subsequent generations’ failure to recall or renew the lessons of the salarization revolution has contributed to the success and intensity of the current business-like government movement.  

I.                Business-like Government in the Twenty-First Century

            Business-like government today centers principally on the following three goals:  

·      Profits.  Proponents of business-like government argue that (re-)infusing profits into public administration will better motivate workers and make government agencies more fiscally accountable.  Those advancing this aspect of business-like government seek, in essence, to supplant or marginalize the salarization regime central to Parrillo’s account of the modern American administrative state. 
·      Hierarchical Organizational Control. Today’s proponents of business-like government further claim that greater executive, managerial control over the bureaucracy will make agencies more responsive and responsible.  Here the main target is the tenured civil service.  The civil service is legally insulated from politicized hiring and firing decisions and thus capable of exercising some degree of independence and autonomy from the political leadership atop government agencies.
·      Eliminate “Red Tape.  Lastly, today’s proponents aim to streamline government decisionmaking and implementation such that public administration becomes more flexible, expedient, and economical.  To do so, they must eliminate, cut through, or work around the thick web of public laws that regulate the conduct of government officials and that authorize extensive public participation in the administrative process.

These three related goals are grouped together under the “business-like” heading for a couple of reasons.  First, the infusion of profits, the furthering of hierarchical organizational control, and the elimination or circumvention of red tape are all frequently advanced through the use of market tools and market actors.  Often, privatization—the harnessing of private resources to carry out public responsibilities—is the go-to vehicle for all three. 
Indeed, privatization allows for-profit service contractors to handle responsibilities previously entrusted to salaried government workers, thus bringing monetary incentives to the fore.  These contractors also lack the civil servants’ job security, and thus are much more likely to be accommodating, compliant “yes” men and women in ways that strengthen the politically appointed leadership’s control over the rank-and-file workforce.  And, because private actors, including most contractors, are subject to fewer regulations and requirements (again, what some label as “red tape”) than are their government counterparts, they often can operate more expeditiously and economically—and with less public input. 
            Second, all three of the goals embedded in today’s business-like agenda are direct responses to the ways in which American public administration has marked itself as different and special.  Parrillo’s salarization revolution, which supplanted facilitative payments (for assisting benefits-seekers) and bounties (for sanctioning regulatory scofflaws), might well be described as a first step in distinguishing government from other organizations or entities in the larger political economy.  In time other reforms reinforced this conception of government as different.  Among these latter reforms, two stand out: the instantiation of a professional, politically insulated civil service and the thickening of a robust legal framework that regulated official conduct and guaranteed broad public participatory rights in administrative governance. 
Wholesale salarization, a tenured civil service empowered to challenge agency leaders, and a thick framework of procedural and participatory rights all reflect ways in which government is distinct.  They are the ways in which government is run like a government.  Not surprisingly, these three points of departure and differentiation are sources of great frustration to those who see government as costly, inefficient, and insufficiently attentive to the virtues of private enterprise and ingenuity.

II.        Lessons Learned and Forgotten

The business-like government agenda today is, of course, immensely popular and increasingly influential.  Part of its success is no doubt due to how much we’ve forgotten—or how little we ever learned—about the salarization revolution and what motivated nineteenth-century government reformers to overthrow the then-extant profiteering compensation schemes. 
Even though the salarization revolution Parrillo describes represents an early and, in some respects, quite modest shift in the direction of government marking itself as different and special, it was nevertheless a momentous one.  It was momentous not just in terms of its effect, but also in terms of its underlying rationale.  Parrillo credits an emerging political backlash against for-profit compensation.  But he also emphasizes a principled explanation.  Officials came to understand profiteering as unseemly and illegitimate in the realm of public administration.  Such an understanding does not turn on either political dynamics or the relative costs and benefits of, say, bounties versus salaries. 
            I suspect that the inclination of many is to discount the principled explanation, or at least doubt its contemporary resonance.  I suspect as much because claims that the government needs to act more seemly or more legitimately are difficult to articulate and prove, especially compared to concrete arguments one can have with respect to cost-benefit analysis or polling data.  How do we measure seemliness?  How, if at all, does it benefit the average citizen? 
            I suspect as much, too, for the simple reason that we don’t hear officials speaking in that register much anymore.  If anything, they’re apologetic or defensive about the ways in which government is differentand are clamoring to show that they too are committed to running government more like a business.
            But a principled explanation is precisely the type of explanation that is most needed today.  Government officials and public lawyers need to own up to the fact that, yes, American public administration is indeed generally more inefficient than most businesses; and, yes, government is indeed more internally rivalrous and inclusively pluralistic in ways that stymie managerial control and otherwise bog down the administrative process.  In owning up to these facts, these officials and lawyers need to explain that such “inefficiencies” are not bugs in the American public-law system.  Rather, they are necessary features of the constitutional and administrative design—a design that reflects government’s attentiveness to the fact it exercises sovereign, coercive powers and does so within the confines of a legal framework that prizes checks and balances among rivalrous sets of stakeholders.    
Government must therefore resist—and, again, explain why it resists—the lures of market expedience and flexibility.  It must resist the temptation to better motivate its sometimes-listless workforce (through profiteering) in order to preserve administrative neutrality and public trust.  It must resist the temptation to impose greater hierarchical control (by marginalizing the sometimes-obstinate civil service) in order to preserve rivalrous engagement between the politically accountable agency leaders and the politically insulated experts within the bureaucracy.  And, it must resist the temptation to contract around undoubtedly nettlesome administrative procedures in order to preserve opportunities for broad public participation as yet another, this time popular, check on how government power is wielded.
Government officials must explain that these forms of resistance are not borne of stubbornness, disregard for the inconvenience it causes those forced to pay higher taxes or forced to wait while regulations are delayed by the filing of comments or held in abeyance during the pendency of judicial review, or the absence of creativity.  (Recall that each of the reform efforts discussed—salarization, the expansion of a civil service, and the development of broad participatory rights—were innovative, even entrepreneurial.  And each signaled turns away from the status quo.) 
Rather, government officials must explain that they resist the temptation to be more expedient, unitary, and legally flexible out of a sense of context-specific and appropriate modesty.  It is a sense of modesty unnecessary in the private sector, where businesses in the United States do not share the same corresponding obligations (because they aren’t acting coercively and are free to focus principally on profits, and on a singular constituency, namely shareholders), and unseen in autocratic states inattentive to the demands of republicanism or the rule of law.  Nevertheless, it is a modesty that legitimates and moderates the American public-law experience and that quite likely provides the security, stability, and means of access to enable businesses to run like businesses. 

III.       Conclusion

            For those who believe in salarization, in a professional, politically insulated civil service, and in broad participatory rights in administrative governance, the challenge going forward is to give new, louder, and fuller voice to the nineteenth-century salarization proponents’ nascent, even inchoate, intuition that the American government ought to act differently.  Until that occurs, however, the debates over business-like government will continue to be argued not just on politically unfavorable terms but also over the wrong normative and legal premises. 
Of course, a more expedient, business-like approach will likely prove to be more expedient.  And, that might well be the measure of a great improvement for a firm or industry focused on, say, wealth maximization—but not necessarily an improvement in the realm of American public administration, where efficiency is a, but hardly the only, normatively or constitutionally salient value.  This isn’t to say that there is no room for government to learn—and borrow—from business (or vice versa).  But it must do so mindful of the fact that government has special obligations and responsibilities that make it necessarily different from most other organizations and entities. 

Jon D. Michaels is a Professor of Law at UCLA School of Law.  He can be reached at michaels [at]

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