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
different—and
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] law.ucla.edu.