Shrinking Government

The tax revolt and the computer revolution will transform government. People will soon be able to choose what "public services" they want-as consumers rather than voters.

Across the English-speaking world, the system of government is breaking down. In the lucky countries (the United States? Australia?), government is due to decline in importance, so the breakdown should not matter. But it may be easier to avoid some pain everywhere if people begin to understand what is happening.

There are two ways in which a free man can choose his government. The most sensible and direct way is by voting with his feet. The individual can go to live in an area where the government—which can in future be a very local government—permits the lifestyle, rules, and customs that he likes. In the 21st century this will become the most usual method of choosing a free man's government, because of the growth of (a) telecommunications (which will make it unnecessary for a brain-worker to live near his workplace) and of (b) commonsense.

The second and dying way of choosing governments is by voting through the ballot box: by pretending that one can affect one's lifestyle through intimating which of two candidates for president or mayor is on some first Tuesday in November putting on the tribal or party demonstration that temporarily annoys one least. As is usual during the decay of a system that worthy institutions and pious men have not quite finished building up, it is unrespectable to point out that democracy is dying and is going to be replaced by something better, called consumers' freedom.

PUBLIC IMPERIALISM

Through all the period shaping our generation's subconscious, the advance to voting democracy has been regarded as trailing clouds of political morality, as unassailable by decent men as were chivalry, Christendom, feudal obligations, the holy inquisition, the divine right of kings, and the British Empire during the periods when quite appalling things were being done in their name. But in the past decade it has become clear that voting democracy cannot work because of (I think) five interconnected reasons.

The advance to voting democracy was advertised as bringing to culmination the process by which power has passed from kings to nobles to capitalists to, finally, us the voting people. Instead, power has passed even in the English-speaking world to what Solzhenitsyn has called the "political bureaucrats" and the "official bureaucrats." These two groups now spend a higher proportion of GNP than did the priests, kings, nobles, and capitalists during their own peak periods of power. Awkwardly, they are spending it with a smaller sense of noblesse oblige than did the old power groups in their tamed later years. Read the Watergate tapes if you do not understand this.

This is not mainly because the Nixons, Haldemans, saved-again southern Baptists, Oxbridge civil servants, town clerks, general secretaries of monopoly trade unions—and other political or official bureaucrats whom we elect, appoint, or get stuck with—are less or more virtuous men than were the originally saintly medieval bishops, crusading kings, nobles created out of chivalry, or pious Andrew Carnegies who had too much power over our fathers before us. It is because people eventually tend to define morality as being directed toward the survival of their own group. The reason why we must never allow particular groups to have too much spending power in their hands is that they are certain eventually to have a main and loyal objective of keeping their own bureaucracies growing, because each decision taker within the system finds that feeding the machine will give him personally a quieter life.

During these 1970s it has therefore unsurprisingly become clear that public-sector imperialism is not going to be curbed by electing politicians who promise to curb it. Ronald Reagan, the archbishop of such promises, was a two-term governor of California; his governorship left California in desperate need of Proposition 13—and (as Irving Kristol has said) he would not really have diminished public-sector imperialism if he had been a two-term president of the United States. In the same way it was always absurd to elect Jimmy Carter to run against Washington from inside Washington. "They," cannot be elected to curb "them."

Public-sector imperialism in democratic countries is not going to be rolled back by electing some monk to dissolve his own monasteries, nor (don't let's become too dramatic) by the 1789 or 1917 types of bloody revolution. But over the next few decades it is now probably going to be rolled back by a worldwide series of broad but changing equivalents of California's Proposition 13.

These reforms will roll slowest, or cause the greatest internal ructions, in the countries where the rot from the era of public-sector imperialism has spread farthest—like Britain, where 30 percent of workers now have jobs in the public sector and, even more significantly, nearly 50 percent of trade-unionized workers do. Awkwardly, it is going to be desirable progressively to eliminate most present jobs in the public sector. This stems from the next embarrassing development during the past decade and a bit.

HOW MUCH GOVERNMENT?

The concentration of spending power in the hands of bureaucrats had been sanctified on the supposition that there are lots of services that can more efficiently be produced by State monopoly than by the market. In the past few years, though, it has become probable that none of these now exists. Even in the 18th century's "traditional four" public services (of justice, police, arms, and some modicum of public administration), rich countries' productivity per man has sometimes declined during the past two and a half decades by over 90 percent, while productivity per man in most free-market industries has more than doubled.

This has happened while technological progress (new psychiatric insights for justice, the information-processing revolutions for the police and public administrators, the extraordinary increase in killing power per dollar spent) should have made it especially easy for advanced countries to have enjoyed more effective crime prevention, cheaper public administration, and simpler national defense. But there really is no way of saying that crime rates have anywhere done anything but soar in response to the employment of more police, to longer hours in court, to new prison regimes; that the doubling of local government administrative staff has anywhere led to greater expedition in the handling of citizens' business, instead of typically taking much longer; that gunboat diplomacy was made more terribly swift and sure as the highest-technology country in the world spent today's equivalent of $500 billion on losing a war to North Vietnam.

Despite this breakdown in traditional public-sector production, the political bureaucrats and official bureaucrats have assumed that extra spending by them would be a good agency for managing many other services, especially health, education, and welfare and housing and urban development. During the peak period of expansion of HEW, health costs rocketed, educational test scores dived, and the welfare system crippled instead of aided its clients. During the peak period of expansion of HUD the centers of cities collapsed.

The breakdown of public-sector productivity has not come about because less-efficient or less-educated people are coming into public service jobs. One of the troubles is precisely that a "new class" of more-educated, energetic, articulate, and ambitious people have come into them—but are working in an environment where cost-effective methods of production cannot now be achieved, for two reasons.

The main reason is this: The decision taker in any efficient productive system must now restlessly ask, "What is the best quickly changing and labor-saving technology that I should use to accomplish this task?" In a State bureaucracy, on the other hand, decision-taking power falls into the hands of people who can explain most suavely that anybody who keeps asking these questions is being a bad colleague by constantly rocking the boat. In some big business corporations, with layer of management sitting upon layer, decision-blocking power has fallen into the hands of similar middle bureaucracies. These go slowly bust or their managements are more quickly taken over by more innovative concerns. But State bureaucracies are not allowed to be improved by death and therefore carry on expanding even when their productivity per man has absurdly disappeared.

The second reason for the accelerating crisis in bureaucratic production is that most State services belong to the "information industry." Clearly, most of the information industry is part of that large section of business where top people cannot much longer sit arranging how the brainworker in the office below can best work with his imagination—and where, instead, innovation and experiment will have to be sought through small, separate, competitive, and entrepreneurial profit centers.

In the 21st century it is at last going to be seen that it is logical to let the size of each local government unit be set flexibly by what local people at each changing moment want. It will be seen as sensible to let them choose as customers, not as voting democrats, between as many variants of competitively tendered services as possible.

In the private sector, a housewife buying food is given the choice: How much food do you want, knowing that this is what you will have to pay if you choose that food from this supermarket? Human beings will not be free until they are allowed, in the smallest possible groups, to answer the question: How much government do you want, having been told that this is what you will have to pay if you are going to choose government of such and such a quantity and quality? (And the quality will preferably be defined in terms of performance contracts—reduced payments to entrepreneurs working on public-service contracts unless by objective tests public administration reaches a certain standard of performance.) There is a conspiracy to pretend that human beings cannot have this choice in governments, but for a large number of public services in the data-processing age they soon can have this choice if they want to.

ACTING POLITICIANS

We are now governed by alternate halves of the 3 percent or so of the people who are interested in excitable adversary-game politics, plus by all of the 30 percent or so of workers who find their way onto taxpayer-financed payrolls. But for some time it has been easy to see that government of this sort would become government too much in favor of greater importance for themselves.

Most of us thought that the eventual bitter reaction against this would flood in unfairly against the official bureaucrats, as when G.K. Chesterton first fulminated against replacement of aristocracy and plutocracy by public-sector imperialism.

We only know the last sad squires ride slowly towards the sea,
And a new people takes the land; and still it is not we.
They have given us into the hands of the new unhappy lords,
Lords without anger and honour, who dare not carry their swords.
They fight by shuffling papers.

And, said Chesterton in a phrase that sums up the welfare mismanaging State of the 20th century, "the load of their loveless pity is worse than the ancient wrongs."

Today, however, the breakdown of public confidence seems more likely to be directed against politicians. This is an unexpected consequence of television. For the first time since Pericles, democratic electors can daily see and hear in their own drawing rooms those whom they vote for. Democracy has thereby become a system of picking men with the qualities characteristic of good television or cinema actors (for example, prima donnas skilled in dissembling?) and then putting them into an adversary daily work environment that would turn a poodle into a paranoiac. They are then asked, amid power and egomania (but also amid occasional appallingly unjust slander), to spend half our money for us, until somebody hears some tape of what they have been saying to each other in private, when there arises a great clamor to put them into prison instead.

TERRIFYING DEMOCRACY

During the period when it was becoming obvious that public-sector imperialism was causing public-sector productivity to crash, the main remaining argument for voting democracy, which I have several times been guilty of citing myself, ran:

While it is admittedly absurd to suppose that voting for Mayor Beame or Mayor Koch is the best way of picking the right quickly changing technology through which to run New York's crime prevention or its drains, and while these services will have to be recompetitioned in some way, yet the system of voting is the right way of deciding which particular man you want to be sitting at the White House to make the great decisions as between peace and war, as between hardheartedness and compassion.

During the past decade it has become suddenly clear that this system does not work.

The heads of government of the two biggest capitalist countries who won large electoral victories in the 1970s (Mr. Nixon and Mr. Tanaka) had each committed felonies that could have sent the normal man to prison. So had Mr. Nixon's vice-president. The head of the British political party who won the biggest personal swing to himself during a television election in these 1970s is at present (rightly or wrongly) on trial for alleged conspiracy and incitement to murder. The British have also in this past year been shocked to discover that, having introduced against Rhodesia a policy of sanctions that could not work, three successive British governments went on spending taxpayers' money on the Beira patrol to fool taxpayers that it was working.

These are the politicians who were arraigned. But a gossipy press has made it clear that Presidents Johnson and Kennedy also did things while in the world's most important secular job that (if their cover-ups had not been so clever at the time) would have peremptorily disgraced them out of public life. During this decade of the 1970s every journalist knows that at least one other major head of government had a debilitating nervous breakdown, but it is not regarded as decent to say this even though while sick he could have started a nuclear war. During recent decades enormous decisions have been taken by democratically elected men now known to have been incapacitated by illness at the time (Woodrow Wilson in 1920, Chamberlain in 1940, Roosevelt at Yalta, Churchill in the middle of his last premiership, while later examples would probably still attract libel actions).

The notion has been spread that radio and television should help voters to judge their leaders better. But the first charismatic leader to rise during the radio age was the rather intelligent young German ex-soldier who in the 1920s visited Dr. Alfred Schwenninger, a Munich psychiatrist, and asked to be registered as his voluntary psychiatric patient because he (the ex-soldier) feared that he was being hit by the most frightful delusions; Dr. Schwenninger apparently told young Mr. Hitler not to worry and analyzed him as a well-balanced young man. Democracy today is a system of choosing politicians by methods of analysis less expert than Dr. Schwenninger's and giving them half our income to spend for us while putting weapons that could destroy the planet into their hands, behind conventional ideas of "loyalties" to the chief that permit ever more terrifying cover-ups.

By the end of Hitler's war the most popular foreign statesman for Britons, according to public opinion polls in that era of "Joe for King," was Mr. Stalin, who 10 years before had set about murdering his rivals, after wringing public confessions from them in open court by methods which probably included threats that he would otherwise kill under torture their infant sons. This was hidden from the British public but should have been known to those with access to the files of the British foreign office. Yet an essentially decent British foreign secretary and his officials in 1945 repatriated Russian prisoners that came into British hands.

This new tradition of loyally and secretly doing whatever is bureaucratically convenient means that (a) the decision process through "democratically elected politicians" has broken down, and (b) the reaction is about to begin against delegating so many activities to them. Fortunately, technology is anyway going to make it much more efficient not to delegate to them so much.

THE COMING REVOLUTION

An American government study has estimated that over half of America's wage dollars are going to people whose job is to sit looking thoughtful as they pass pieces of information around, and these workers are now twice as numerous as workers in manufacturing and agriculture combined. The potential productivity of workers in this largest industry is about to grow by several hundred percent, because of an information revolution far bigger than the Industrial Revolution after James Watt discovered the steam engine. Anybody who believes that after this information revolution a voter-employed bureaucracy can continue to be the main instrument of government is being as daft as anybody who forecast in 1816 that the number of handloom weavers would continue to grow and grow.

The nature of the computer's information revolution is the exact opposite of that of the steam engine's Industrial Revolution. The steam engine made startup costs for the individual entrepreneur larger and larger, so that today "there is no way an ordinary citizen could walk into a modern complex factory and use its facilities to construct something useful for himself."* But the data banks of tomorrow are going to be places into which every part-time enthusiast can telecommute. In all jobs connected with the use of information, start-up costs for the individual entrepreneur are going to grow smaller and smaller and smaller. It "was never thus with power shovels and punch presses."

The contributors to the information marketplace of tomorrow will have to decide how to distribute their information as between the "higher-price-pay-for-what-you-get" part of the system or the "low-price-mass-consumption" section. The consumers will early be aided by brokers who will offer proprietary indexing and search routines. But the big advance will come when a solution is found to the main search-procedure problem, analogous to that of "seeking something in the Yellow Pages without knowing what the thing is called." A solution will emerge to this through developments arising from computer-aided learning systems. From the tracks created by previous users as they browsed through the data bank, "the system can easily calculate what might be the most appropriate information to be presented to the user next."

Once there is this breakthrough, and search procedures are competitively supplied, it will be realized that the revolution in the "creation of information is quite different from the creation of automobiles. Composers of music do not work in large organizations. Today most composers are entrepreneurs in their own right. Similarly, tomorrow's significant participators in the information marketplace will be independent entrepreneurs."

It is silly to suppose that this revolution in the information industry can leave unentrepreneurialized the biggest and least-efficient part of the huge information industry—the public sector.

VARIETY IN GOVERNMENT

Take the biggest public-sector industry in rich countries now, which is education. Today most civilized people would agree with Oliver Stutchbury, who resigned as a Labour alderman on the Greater London Council and helped to start the campaign to abolish the Greater London Council:

Nobody knows what the best way of educating the young is. There are no economies of scale or other arguments which can be validly made for requiring children all over England and Wales to conform to the same pattern. What is emphatically not needed is a central policy. What is needed is the maximum variety of different schools and institutions of learning.

Tomorrow what will be available in data banks is not just "the maximum variety of different schools" and not just open university courses picked by some bureaucrat for showing on the BBC. What will be available in data banks is a network of search procedures for fitting education to an unimaginable variety of individual learning patterns. Education ministers must be living in either Toytown or Prussia if they think they can continue to give monopolies to whatever sorts of teacher-dominated institutions best fit their political party's social prejudices.

Mr. Stutchbury's argument is already even more true of most of the other basic public services. Nobody today knows what is the best way of bringing aid to the handicapped, curing or deterring criminals, operating personal social services, doing the real jobs of town clerks. There are no economies of scale or other arguments which can be validly made for requiring people all over England and Wales to conform to the same patterns. What is emphatically not needed is a central policy. What is needed is the maximum variety of different output-oriented initiatives, checked for results all the time, changing as the available technological opportunity changes. That is what is going to become available to quite small groups of people during the information revolution.

Localities will spring up that will offer various lifestyles based on making intelligent choices of output-oriented "public services" from among the changing varieties on offer. If central governments say that "you must not run your efficient services but must use our failing ones," the civilized people will move outside the remit of these central governments either to commercially developed communities or else to participatory communes of a sort they like.

MICKEY MOUSE FOR MAYOR

An example of local government functions run by a commercial firm is Disney World, the 43 square miles of former Florida swamp that have been turned into a tourist resort by the Disney group. A visit to the computer room that runs much of its local government operation is not at all like a visit to Camden town hall. The same monitoring by computer as checks constantly that the roller-coaster is not about to develop metal fatigue checks each moment on the functioning of Disney World's utilities, its very modern public transport systems (including monorails and people-movers), its innovatory methods of power generation, sewage treatment, and trash recycling. A remorseless hunt for greater-productivity-tomorrow infuses even the departments whose output targets are "keep the place tidy" and "prevent crime."

Disney World customers likely to be carrying food or trash are cunningly streamed past trash disposal slots that are operated so they will not be overflowing. "Security hosts," often of the high school football coach type, sometimes dressed as Goofy, congregate quickly wherever there is liable to be trouble. A large number of other Disney employees carry walkie-talkies, so as to keep in touch with the "security hosts" and with the limited number of places of egress from the tourist resort. The result is an extraordinary absence of both litter and crime from an area of 43 square miles that is visited each year by 14 million people, many of them picnickers in casual clothes with wallets full of holiday money bulging out of trouser backpockets (although the search is constant to ensure that cash is paid out only at a relatively few but tactfully guarded cash-handling points).

The productivity of local government operations is several hundred percent higher in private-sector Disney World than it is in the public-sector imperialisms. The reason is that local government in Disney is a customer-oriented, market-dependent, entrepreneurial job carried out with output targets. By contrast, in the public-sector imperialisms local government is a producer-oriented, non-market-checked, bureaucratic job (so that there can be public-sector precincts where the marginal productivity of an extra detective is plainly nil, while the marginal productivity of an extra policeman-on-the-beat is high, but where policemen-on-the-beat continue to be promoted into becoming detectives because the latter is a nicer job). If Mickey Mouse were everywhere elected mayor on a performance contract, then local government efficiency would everywhere multiply several times over.

This is not to advocate that Mickey Mouse should everywhere be elected mayor. Many people (including me) would find him too much of a social nagger. But it does seem to me increasingly desirable that people like him should stand in competition with political parties and with other private-enterprise community developers (of which the Disney group is only one example in Florida and California) on local government ballots. The political parties should advertise that they are in pursuit of whatever political parties think they do now pursue, and the entrepreneurs should advertise that they are in pursuit of profit-making performance contracts. "We will impose property taxes at Proposition 13 levels and make a profit from them and will contract to cut taxes below that level if crime rates, waiting time for buses, named environmental unpleasantnesses, do not fall this year by 5 percent."

MAXIMUM CHOICE

As monopoly government becomes subjected to the healthy forces of competition, there will be a slow puncturing of one of the most persistent economic misconceptions that has propped up the age of public-sector imperialisms. This is the misconception that in this age of mobility there are still "externalities" attached to the provision of most so-called public goods and services (for example, the old argument that "everybody gains from the central provision of national defense and from the building of new universities, so everybody should pay collectively for them"). Frightful crimes have been committed in that misconception's name.

In Northern Ireland, everybody has not gained from the provision of national defense by the United Kingdom; a whole generation of kids has been brutalized by it (and the IRA). I once played a tiny part in helping to agitate for the establishment of a university in an area which some of us thought would gain in dignified culture and economic infrastructure from a seat of learning there; that riot-torn university later became that area's most irritating pollutant and a main reason why no sensible industrialist would start a factory anywhere near it.

The competitive information marketplace in the computer age will allow small groups of people to decide for themselves how much of such services they want, instead of having damn fool committees composed of people like me trying to think-tank such decisions for them. University learning will, anyway, be one of the earliest services to become mainly a matter of hitching oneself from anywhere into an information network, except when (as can happen) a university makes itself into a nice environment in which to live.

It will gradually become apparent that what is a necessary "public good," in the sense of something that must be decided collectively, is the organization of market systems so that each of us has the maximum possible intelligent choice of lifestyles. But present "political bureaucracy" and "official bureaucracy" exist largely so as to deprive us of that very choice. As Irving Kristol has said, the most intelligent members of this bureaucracy are

basically suspicious of, and hostile to, the market precisely because the market is so vulgarly democratic—one dollar, one vote. A civilization shaped by market transactions is a civilization responsive to the common appetites, preferences, and aspirations of common people. The "new class"—intelligent, educated, energetic—has little respect for such a commonplace civilization. It wishes to see its "ideals" more effectual than the market is likely to permit them to be. And so it tries always to supersede economics by politics—an activity in which it is most competent, since it has the talents and the implicit authority to shape public opinion on all larger issues.

But the new information marketplace will make clearer to everybody how these "common appetites, preferences and aspirations of common people" can be marvelously assuaged. It will eventually be sensible to allow each volunteering group, down to a single hippie commune or private developer's estate, to contract out of as much government as it wants to (subject to its lack of government not spoiling neighbors' quality of life) and to contract up to larger organizations whatever functions can more economically be contracted up (for example, it is conventional to say that national defense and foreign affairs can most economically be contracted up to national government level, but they can probably more sensibly eventually be contracted somewhere above that).

INFLATION WILL HELP

It is not going to be easy to dash toward all this. But advantage might be taken of the movement created by another and much simpler reason why public-sector imperialism is going to break down: the reaction against inflation.

Inflation has been caused by one particular manifestation of the age of public-sector imperialism: the nationalization during the 20th century of the production of money. Before 1914 the gold standard prevented officialdom from increasing the money supply. Private profit-making banks could and did create paper credit, but the attraction of such paper money remained limited by the insecurity of the issuing banks. In consequence, in the 50 years before 1914 prices in Britain dropped by 11 percent and long-term interest rates in the same period fluctuated only between 2½ and 3½ percent.

Since 1918 governments have acquired the right to print money, and they do so whenever pressures are put on them: such as (a) "print more money or there will be higher unemployment," or (b) "print more money or trade union demands for higher wages cannot be met, and then there will be strikes."

To many of us, it once seemed rational that governments should have the right to make such surrenders. But (a) the argument that it is sensible to allow inflation, in order to keep down unemployment, loses attraction in these 1970s as rich countries have decided that high inflation is the main reason why they must continue to allow high unemployment to stay on up; and (b) it has become clear that when trade unions feel that government will increase the money supply in order to accommodate their demands, they will make higher demands. Everybody is intelligent enough to maximize his demands according to the likelihood that those in power will give way to them. Arguments that wage demands are determined by any less logical reason (such as "intensities of feeling about unfair distribution of income") are sociological guff.

It follows that new constraints will have to be put on governments to stop them from being able to increase the money supply so freely. I am tempted at this stage to expound which constraints I think are wrong and right, but my macroeconomic prejudices are not the point here. We macroeconomists are happily becoming unimportant.

A much wider revolution is now afoot in America, where the fastest-growing economic movement is that connected with the new theory of "public choice" or "economics of politics." The London Institute of Economic Affairs has held one of the few seminars in Britain devoted to this. Some of the best sentences in the next four paragraphs are pinched from its published proceedings (The Economics of Politics, IEA Readings 18), although the worst ruderies about the rival post-Arrow "collective choice" school are essentially mine.

LIMITING PUBLIC CHOICE

Prof. Kenneth Arrow won a Nobel prize in economics for his efforts to discover a "social welfare function," designed to be useful in guiding the planning authority for a society—and then discovering to his surprise and chagrin that it is logically impossible for any such function to exist. You cannot by majority voting get to the best way of satisfying individual and social choices. [See "The Paradox of Voting," REASON, Apr. 1979.]

Instead of deducing from this that government had better make as few choices as possible, economists have written hundreds of papers since the publication of Arrow's "impossibility theorem," most of them essential trivial, trying to show how governments should most nearly do what they cannot do by bullying people about by as little as they then must. The nonsense in all papers from this school favoring "collective choice" is the belief that, once they have written their equations, which nobody except others in the same school are both clever and fatuous enough to read, then political bureaucrats and official bureaucrats will hurry to govern in accordance with what their equations say. The rival school of "public choice" or "the economics of politics" has recognized that political bureaucrats and official bureaucrats will naturally work to advance their own self-interest instead.

The "public choice" professors are clearly right to say that nearly all public goods now will attract excessive public expenditure. "The excess budget is spent on some erratic combination of inefficiency and oversupply." This school of economists in the United States has played an important part in "Proposition 13" and other initiatives to cut government expenditure in America. Members like Prof. James Buchanan are determined to find ways whereby "governments can be controlled by constitutions" and there can be a "reconstruction of the political order that will channel the self-serving behavior of participants towards the common good in a manner that comes as close as possible to that described for us by Adam Smith with regard to the economic order." These are intelligent men who will work with politicians and (despite this) will have some growing effect.

COMPETITION ON THE WAY

For all of the reasons given here, the power of governments is going to be diminished. The first reason is that a reaction is now in train against public-sector imperialism. The second is that the productivity of public spending has disappeared. The third is that the system of follow-our-chosen-leader has now become a system for being led by dissembling television actors whom the system can then drive neurotic. The fourth and biggest reason is that the computer revolution is going to make all of the information industry (including bureaucracy) a field for small-scale experimental entrepreneurship instead of from-the-top-down managerial hierarchies. The fifth is that the rather small revolt against price inflation is now accidentally accelerating the larger revolt against public-sector imperialism.

It has been noted by Walter Eltis that "57 percent of industrial jobs are lost throughout North America every 10 years as a result of the closing down and contraction of factories, and the competition of new products against existing designs." In the public sector the closing of existing jobs in their present form clearly needs to be quicker than that and competition from new designs more fast and furious.

Public-sector imperialism is a device for shouting "perish such thoughts." This sanctified obstruction is not going to last long. Throughout its former domain there will be competition from new designs. Many intelligent critics expect them to come more slowly than I have been suggesting, with indirect State holdings in industry expanding for a while. But the business of government itself is near the end of its long uneconomic boom. My own guess is that, in 30 years, the ideas tentatively sketched in this survey will look too bureaucratically brainwashed.

Norman Macrae is deputy editor of the Economist, from which this article is reprinted, with permission.

*This quotation is from Bell Canada's Gordon Thompson. Further passages in quotation marks in these next two paragraphs are also from Thompson, who is the expert in this field who writes intelligible English.