PROLOGUE

THE PARADOX

In the United States at this time Liberalism is not only the dominant but even the sole intellectual tradition. For it is the plain fact that nowadays there are no conservative or reactionary ideas in general circulation.… The conservative impulse and the reactionary impulse do not, with some isolated and some ecclesiastical exceptions, express themselves in ideas but only in action or in irritable mental gestures which seek to resemble ideas.

—LIONEL TRILLING, The Liberal Imagination (1950)

AT THE MIDDLE of the twentieth century, the concept of limited government seemed moribund. Americans still called their nation the “land of the free,” but hardly anything was said about the dream of the founders, in which “the sum of good government,” as Thomas Jefferson expressed it in his first inaugural address, is one that “shall restrain men from injuring one another [and] shall leave them otherwise free to regulate their own pursuits of industry and improvement.” As of 1950, hardly anyone was talking about Madisonian ideals in academia, the broadcast media, newspapers, popular or intellectual magazines, or the halls of Congress.

For the next decade, liberalism expanded its influence even among Republicans. Dwight Eisenhower, who didn’t identify himself as a Republican until the late 1940s and never identified himself as a conservative, won the White House as a “modern Republican,” which he defined as “conservative when it comes to money and liberal when it comes to human beings.”[1] By the 1960 election, Arthur Krock could write in the New York Times that “when the national platforms and candidates of 1960 have been chosen, the American voters will find it difficult to detect a major ideological difference between the two major parties.”2 Another New York Times journalist, Charles Frankel, captured the spirit of 1960 in an article entitled “A Liberal Is a Liberal Is a Liberal—”: “The word [liberal],” he wrote, “apparently designates an attitude of mind and an outlook on the world which relatively few Americans are willing to say unequivocally that they do not share.” He pointed out that Herbert Hoover, Dwight Eisenhower, and Richard Nixon had each “had kind words to say about ‘liberalism’ and … would bridle if he were called ‘anti-liberal.’ ”3

The Resurgence of Madisonian Thought

Just four years later, the Republican Party nominated Barry Goldwater, a full-fledged Madisonian, for president of the United States. Beneath the radar screen of the New York Times and the rest of the mainstream media, Madisonian thought had been making a comeback.

It began in the 1930s, even as the New Deal was triumphant in the United States, with Ludwig von Mises and Friedrich Hayek, leaders of the Austrian School of economics. Their ideas entered the public conversation in 1944 with Hayek’s brilliant polemic The Road to Serfdom. In 1947, two young economists, Milton Friedman and George Stigler, were part of a conference organized by Hayek that led to the formation of the Mont Pelerin Society. In 1951, William F. Buckley Jr. published God and Man at Yale. In 1955, Buckley founded the National Review.[4] In 1957, Ayn Rand published Atlas Shrugged. In 1960, Sen. Barry Goldwater published Conscience of a Conservative. In 1962, Milton Friedman published Capitalism and Freedom.

These events were outcroppings of a larger movement by which an older generation of Republicans rediscovered the founders’ vision of a free society and the new generation encountered it for the first time. They believed passionately, labored tirelessly, and turned out the Goldwater vote in the primaries. And so to the dismay of the Republican establishment, Barry Goldwater defeated the quintessential modern Republican, Nelson Rockefeller, for the 1964 presidential nomination.

Goldwater then lost to Lyndon Johnson by a landslide. It was no surprise. The mood of the country after John F. Kennedy’s assassination would have produced a Johnson landslide against any Republican candidate. Apart from that, the ideas of limited government attracted the support of just one segment of the Republican Party, never mind the electorate as a whole. But Goldwater’s candidacy signaled that the Madisonian political legacy had been resuscitated. The capstone of the 1964 election campaign was provided not by Goldwater himself but by Ronald Reagan, in a nationally broadcast speech delivered the week before the election. It was a full-throated evocation of Madisonian ideals that catapulted a second-tier movie star to national attention as a political figure. Reagan captured the California governorship two years later.

The Republican establishment reasserted itself in 1968, nominating Richard Nixon, but the new generation of Madisonians did not think of themselves as Republicans first. Some saw themselves as conservatives, others as libertarians, but they all channeled their energies into spreading the cause of limited government. Their cause blossomed.

In the 1970s, wealthy men provided the money for Madisonians to compete with an elite culture that had become monolithically liberal, and the result was a network of energetic think tanks of the right. The venerable American Enterprise Institute, Hoover Institution, and Foundation for Economic Education were joined by the Heritage Foundation in 1973 (Joseph Coors provided the seed money), the Cato Institute in 1976 (marking Charles Koch’s entry into the policy world), the Manhattan Institute in 1978 (Antony Fisher and William Casey), and the Pacific Research Institute in 1979 (Antony Fisher and James North). They were followed in the 1980s and 1990s by many more.[5] Together, they changed the policy conversation.

The public intellectuals of the Madisonian right were recognized in unlikely places. The Nobel Prize in economics was awarded to Friedrich Hayek in 1974 and to Milton Friedman in 1976. Robert Nozick’s dazzling philosophical treatise on limited government, Anarchy, State, and Utopia, won the National Book Award for 1975. The right even became cool in some circles. Libertarians, with their laissez-faire policies toward sex, drugs, and the rest of the counterculture, were most naturally cool. But in the public-policy arena, the neoconservatives were even cooler. Irving Kristol’s The Public Interest and Norman Podhoretz’s Commentary became must-reads for everyone, including serious policy wonks of the left, who wanted to be up to speed on new ideas in public policy.

The continued resurgence of Madisonian thought during the 1970s was fueled by the failures of liberalism. The idealism that had accompanied the passage of the 1964 Civil Rights Act was gone within a few years, replaced by antiwar bitterness and disillusionment over what Johnson’s domestic policies had wrought. Welfare rolls had tripled in the decade after Johnson came to office. Unprecedented crime rates had made living in a major city a daily exercise in self-protection. Aggressive affirmative action had outraged the members of the white working class who were most directly affected. School busing had enraged parents—a rage that burned even hotter as high-profile liberals such as Teddy Kennedy piously praised the public schools while sending their own children to private schools. The poverty rate, which had been dropping rapidly from the end of World War II through the first half of the 1960s, had leveled off in the late 1960s and had stopped going down altogether by the early 1970s. The central cities of America’s great metropolises were scarred with blocks of burned-out and abandoned buildings. The homeless had become a new and painfully visible American subculture.

Meanwhile, the intellectual wing of liberalism was digging itself into the humorless and impossibly abstruse schools of postmodernism and semiotics, explaining every conceivable topic with the new holy trinity of the left: race, class, and gender. By the mid-1970s, nobody in the public-policy world paid much attention to thinkers on the left—all the interesting action was coming from the right. Democratic politicians became as reluctant to call themselves liberals as Republican politicians had been to call themselves conservatives in the 1950s.

In terms of excitement and optimism, the Reagan years from 1981 through 1988 saw the apogee of the limited-government movement. But even after Reagan left office, political representation of principled Madisonians in Congress increased. In the 1994 election, the GOP won both houses of Congress for the first time since the 1940s, pledged to a “contract with America” that had several limited-government components. In 2000, Republicans added the presidency to their control of Congress—the first time the GOP had controlled the White House and both houses of Congress since the Hoover administration. In 2009, the political appeal of Madisonian thought saw a fresh manifestation in the Tea Party, which in its initial stage was focused single-mindedly on restoring limited government.

The progress made since the end of World War II remains dramatic. Today, rigorous Madisonian policy analysis is prominent in almost any important policy debate. The nation’s leading law faculties include Madisonian constitutional scholars. Free-market economists are represented in the economics departments of the nation’s elite universities. In the popular culture, talk radio and the Fox television network abound in spokespersons for Madisonian ideas. By objective measures, the last fifty years have seen Madisonian thought emerge from obscurity to prominence and influence.

And Yet Government Metastasized

The resurgence of Madisonian thought also coincided with unprecedented—actually, previously unimaginable—growth in the size and reach of government.

Lyndon Johnson’s accession marked the beginning of sixteen years of explosive growth in federal authority. In 1963, the number of pages in the Code of Federal Regulations was about the same as it had been at the end of World War II. From 1963 through 1968, the code increased by an average of 5,537 pages per year.[6] In addition to the flood of new regulations, Lyndon Johnson’s administration saw the advent of covert regulation through federal largesse. Thus the Elementary and Secondary Education Act of 1965 began to provide large-scale financial support to K–12 schools, but only if those schools adopted federal guidelines on how the money was to be used. Of course, the schools did take the money, and everybody had to comply with Washington’s preferences.

It was a strategy that the federal government employed for a variety of programs. By the time Lyndon Johnson left office at the beginning of 1969, the federal government had acquired major roles in local education and law enforcement. The policy environment surrounding the formation of families had been radically altered. The federal government was watching over employers’ shoulders about employment decisions, how products were designed, how they were marketed, and how services were provided. Directly and indirectly, federal rules about permissible conduct reached down to the neighborhood and into the home.

The Nixon years brought no relief. On the contrary, Richard Nixon presided over a regulatory revolution from 1970 to 1974 that included the creation of two of the most visible regulatory agencies, the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA). The Supreme Court’s decision in Griggs v. Duke Power in 1971 followed by congressional legislation in 1972 gave the Equal Employment Opportunity Commission (EEOC) expanded authority to oversee employers’ employment practices. Combined, OSHA, the EPA, and the EEOC affected virtually every workplace. It was also during the Nixon years that the slope of federal spending on social and economic programs turned sharply upward.7

By the time Ronald Reagan was inaugurated, the expansion of the federal government had a life of its own. Reagan slowed that expansion during the 1980s, but he could not stop it, let alone reverse it. Entitlements were going to grow no matter what, mandated by laws that Congress was not about to change. Regulations were going to proliferate no matter what, because regulatory agencies have legal authority to go on making up regulations without additional instruction from Congress or approval from the White House.

It is hard to find metrics to convey how much the federal government’s scope and power grew during the same fifty years when Madisonian thought was resurgent. I can give you the dollar figures (from a federal budget of $679 billion in 1960 to $3.4 trillion in 2012, in constant 2010 dollars).8 Or the increase in pages in the Code of Federal Regulations (from 22,877 pages in 1960 to 174,545 pages in 2012).9 I can tell you that the number of federal independent agencies grew from thirteen to seventy.10

But such numbers are too abstract. They don’t capture the reality of the Leviathan that the federal government has become. Thinking that perhaps a specific example would help, I went to the website for the Department of Energy (you may replicate the exercise with any cabinet department you prefer) and pulled up its organization chart.[11] As of 2013, three undersecretaries reported to the Office of the Secretary of Energy. Combined, those three undersecretaries ran twenty-nine separate offices, most of them headed by a deputy administrator or associate administrator. In addition, the heads of fifteen other offices reported directly to the Office of the Secretary. That’s forty-four entities that reported either to the Secretary of Energy or to one of his three undersecretaries.

While examining this chart, I clicked randomly on one of those forty-four entities, the Office of Health, Safety and Security, and found that up to that point I had reached only the lobby of the bureaucratic maze. The Office of Health, Safety and Security had five divisions reporting to the chief. The heads of those divisions had a total of thirty-seven offices reporting to them. And lest you think that by the time you get this deep into the organization chart, “office” means literally a single office with just one person in it, all of these offices had directors and staffs of unknown size. We’re looking at hundreds—I didn’t try to count them all—of entities within the Department of Energy alone. Throughout the exercise, as I read gobbledygook office titles and incomprehensible mission statements, the question echoing in my head was, “What do these people do every day?”[12]

That’s one cabinet department out of fifteen, not to mention seventy independent agencies that are not part of any cabinet department. Let that sink in for a moment. And then realize that all of those people in all of those offices are just a fraction of those who actually are part of the federal Leviathan. Consider:

•  Federal funds account for about a quarter of state and local revenues. Some large proportion of state and local employees are, for practical purposes, federal employees. The number of state and local employees increased from 7.2 million in 1963 to 19.3 million in 2012.13

•  The federal government now spends more than $500 billion a year on contracts with for-profit firms, many of which depend on the federal government for most or all of their income. As of 2012, businesses getting federal contracts accounted for about 22 percent of the American workforce.14

•  The subset of nonprofit organizations that filed reports with the IRS had about $2 trillion in revenues, of which about one-third comes from government. Nonprofits employ about 11 percent of the American workforce.15

•  Government spending at all levels now averages about 40 percent of GDP, with the federal government accounting for 24 percent.16

Under Republicans and Democrats alike, the federal government went from nearly invisible in the daily life of ordinary Americans in the 1950s to an omnipresent backdrop today.

The Paradox in Perspective

The government’s continuing expansion doesn’t mean that the resurgence in Madisonian thought had no effects. On the contrary, the resurgence made a big difference in terms of discrete policy issues. Crime is no longer a national issue, as it was during the 1970s and 1980s, in large part because of scholars and activists on the right whose work revolutionized policing and imprisonment policy. Such scholars and activists were instrumental in producing the welfare reform act of 1996 and the large drop in the welfare rolls that followed. Scholars and activists on the right energized the school-choice and deregulatory movements. Free-market economists have over the last half century established the superiority of capitalism in generating wealth, with immeasurable effects on sustaining capitalism (which had been losing ground before the Madisonian resurgence) and reducing poverty throughout the world. Similar observations could be made about the positive effects of efforts from the right that dealt with taxes, housing, land use, and many other policy matters.

So let it be clear that I think the resurgence in Madisonian thought has won battles and done good. This book is not intended to belittle those accomplishments or to discourage us from continuing our efforts. But we need to rethink our larger strategy. We have won battles, but we are losing the war. It’s time to open a new front.