I think Tyler Cowen and Arnold Kling are talking past the problem in their recent discussion of Canada’s return from the brink of bankruptcy in the late 1990s. The background is that Canada had, by 1993, secured a national debt so staggering that the Wall Street Journal was calling it “an honorary member of the third world,” but by 1997 had its debt relatively under control and its deficit completely under control (it was running surpluses). The question is whether the United States could ever muster the kind of political discipline necessary to pull off such a coup, and the contention is that it probably can’t. From Tyler Cowen’s point of view, it can’t because its citizens don’t have the requisite trust in government to weather a series of painful discretionary spending cuts. Arnold Kling largely agrees, but with the caveat that the ruling classes first have to start acting trustworthy before we can talk about whether the public trusts them enough.
I think both Cowen and Kling are mistaking apathy for something nobler – a problem I’ve blogged about before with regard to Robin Hanson. Canadians don’t trust their government any more than we do, nor do they have any more reason to. David Henderson makes this point in response to Kling, so let me just add that IN PARTICULAR the government that pulled off this financial coup wasn’t trusted by the public, and was in fact the subject of the so-called Sponsorship Scandal, Canada’s largest spending corruption investigation in recent times. What all of the countries (Canada, Sweden, Ireland, Finland) cited as examples by Cowen ALSO have in common, in addition to being “center-left” and having populations that “trust” their masters, is that they’re pretty close to being de facto one-party states. OK, I’m exaggerating a bit about Canada and Ireland, and Finland and Sweden have both come a long way since the 70s, but it’s fair to say that all of these countries have a “default” party that, all else equal, is in power, where “all else” has been “equal” a minimum of 75% of the time since the early 1930s. In Canada it’s the Liberals, in Sweden Socialdemokratarna, in Ireland Fianna Fáil, and in Finland whatever party the Kekkonen
dictatorship presidency ruled governed under.
Now, of course it’s a chicken-and-egg problem teasing apart whether the dominance of the Liberals in Canada causes or is caused by the general popular consensus there. And trying to tease that apart gets into some much thornier questions. Without getting into it too deeply, I will say that I’ve never bought that the Liberals in Canada are “further left” than our Democrats. I think they are PRECISELY “our Democrats” unconstrained by checks and balances. Proving it is a complicated task – a task I freely admit I’m not up to in terms of background research – but I’ve long privately suspected that with a Westminister system down here where the President were instead a Prime Minister – the head of the largest party in Commons – we would look an awful lot like Canada. Which is to say, I think the Democrats would have consolidated their position here about the same time the Liberals did in Canada, and along the same policy lines. And then our citizens would similarly feel that there was little to be done about the Federal Government, for better or for worse. The point there is just that I think Cowen and Kling need to look somewhere else besides the “trustworthiness” of the elites – or the correlated willingess of the public to trust them – in tackling this question. I think what is being mistaken for “trust” is a lack of grassroots activism. Citizens of the USA have a greater attachment to the idea that they can make their voices heard in government policy. That may well be an illusion – but it’s easy to see where it comes from: the Congress frequently changes hands, the Presidency does so even more often, the Congress and the President don’t always get their respective ways, and the Supreme Court sometimes steps in and shuts down whole sets of laws as unconstitutional. It isn’t like in Canada, where once a bill is passed it’s just passed, and since the Liberals are probably going to win the next election anyway there’s little thought of getting it repealed.
As a parting shot: the one time we did come close to tackling our budget problems it was because of a flirtation with a Parliamentary system. Newt Gingrich had managed to pull off a Westminister-style national campaign, and President Clinton accepted the change and largely just haggled over details. So Cowen and Kling are probably on to something, but for the wrong reasons. And of course, the fact that it has happened here before does rather suggest an answer to their question: yes, the US can do it again.