Creatively Destroying Government

Posted: May 03, 2014 12:01 AM

If you want to understand how markets, and creative destruction, work, just turn to the comics page in your local newspaper. If you can find a copy. Newspaper circulation is tumbling.

Yet comics, and the newspapers they appear in, exist in the free market. As newspapers fade, people will be forced to find other ways to follow their beloved strips. Artists will adapt. Some will go out of business. Others will thrive, perhaps by moving to Web-only strips supported by advertising.

Government, on the other hand, doesn’t adapt.

To cite one example, the federal government runs at least 47 programs aimed at training workers. They don’t work. “Federal job training programs targeting youth and young adults have been found to be extraordinarily ineffective,” The Heritage Foundation’s David Muhlhausen writes. “The simple fact is that when it comes to federal job training programs, there is a dearth of evidence suggesting that these programs work.”

And the government itself agrees. “Only 5 of the 47 programs have had impact studies that assess whether the program is responsible for improved employment outcomes,” the Government Accounting Office has written. “The five impact studies generally found that the effects of participation were not consistent across programs, with only some demonstrating positive impacts that tended to be small, inconclusive, or restricted to short-term impacts.”

Yet each program seems to have enough supporters to keep it alive. Whenever Congress creates a new program, it simply leaves the old ones operating as well. It’s the embodiment of what Ronald Reagan said in 1964: “No government ever voluntarily reduces itself in size. So governments’ programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth.”

That proved prescient: as a presidential candidate, Reagan vowed to shutter the Department of Education. As president, he not only failed to do so, he ended up seeing the budget doubled.

If the federal government would get out of the way, private industry could do a better job providing many services that are now handled out of Washington. National Review’s Kevin Williamson has an entire book explaining how: “The End Is Near and It’s Going to Be Awesome.” But his projected awesomeness relies on the federal government conducting an orderly retreat from dozens of things it shouldn’t be doing in the first place. Such as job training programs.

That’s something it hasn’t managed to do yet.

“Look at people who say, ‘I'm going to shrink the government!’ Well, show me when they actually did shrink the government. They caused it not to grow as much, but shrink? When? You know, good luck on that,” Bill Gates says in Rolling Stone. He’s right, but only because we haven’t yet applied creative destruction to government.

People who read comics are fiercely loyal to their favorites. Even oldies such as Mark Trail and Judge Parker have their fans. They’ve succeeded in their individual market, and so it can seem as if old strips just go on forever: See Peanuts (Charles Schultz has been dead since 2000), Doonesbury (Garry Trudeau is on a long hiatus) and For Better or For Worse (currently recycling strips from the 1980s).

At first blush, that seems similar to the way government works. Once they’re established, it’s almost impossible to cull old programs. Yet creative destruction means newspapers will soon become online only outlets, a process that’s already underway in markets such as Syracuse.

The practice of channeling things such as job training, medical care and retirement benefits through the federal government is as obsolete as printing comics on newsprint. It’s happening elsewhere already; now we need to apply creative destruction to government.