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Excerpt from America’s Political Inventors

DECENTRALISM FILE

George W. Liebmann

( 1939-        ), a Baltimore lawyer, is the author of numerous works on the potential of sub-local institutions, notably The Little Platoons: Sub-Local Governments in Modern History (Praeger 1995) and Solving Problems Without Large Government: Devolution, Fairness and Equality (Praeger 1999), republished as Neighborhood Futures (Transaction Books 2002). His most recent book, America’s Political Inventors: The Lost Art of Legislation (Bloomsbury, 2019) also deals with this subject. He has played a role in resisting a number of attempts at over-centralization, successfully arguing in the Supreme Court Dandridge v. Williams, which brought an end to the ‘welfare rights’ movement; representing 34 state governments in a brief relied on by the Supreme Court opposing the attempted nationalization of school finance issues in San Antonio v. Rodriguez; and in mobilizing opposition to proposals for vast expansion of the federal criminal code during the Johnson and Nixon administrations. The following is excerpted from America’s Political Inventors.

The Way Forward

 

It is easy to catalogue the flaws of much recent [U.S.] legislation, with its overregulation dampening individual and local initiative (as in the No Child Left  Behind education legislation, with its encouragement of standardized tests and rote learning); its perverse incentives, moral hazards, and unintended  consequences (as in the discipline and hearing provisions of the Individuals With Disabilities Education Act, which have encumbered the disciplining not only ‘disabled’ students, but of all students); its assumption that good intentions produce good results (as in the same act’s assumption that ‘mainstreaming’ of retarded students is at all times the best policy, a notion later repudiated by Lady Warnock, the ‘mother’ of the movement for ‘mainstreaming’);  its too frequent refusal to legislate for people as they are (as with the assumption that welfare programs conferring benefits on broken families would have no effects on behavior).

“The construction of a theoretical paradise is the easiest of human efforts”, Charles Evans Hughes observed. “This is a far lighter undertaking than the necessary and unspectacular task, taking human nature as it is and is likely to remain, of contriving improvements that are workable”. The premise of what follows is that what most people still want is the modest utopia described by Michael J. Bennett in his book on the G. I. Bill: “living in a system that rewards being an honest citizen and a hard worker.”  Roosevelt’s cash relief programs encountered much greater resistance than his programs to provide employment; resistance to welfare appropriations was reduced by the work requirements legitimized by the 1996 welfare reform legislation. There are here tendered  some suggestions whose practicability has been demonstrated and that accord with that premise:

 

  1. The national government can no longer foster state, local and private initiative through grants of land, but the successor to the public domain is the command of public finance deriving from the 16th Amendment and the income tax. It is neither legitimate nor efficient for the national government to attempt to regulate all local and private activity through the device of conditional grants in aid. The national legislatures of all the major countries of Western Europe: Germany, France, Britain, Italy and Spain as well as that of Canada have in the last forty years found it possible to accord provincial and/or local governments guaranteed shares of the national income tax. It is time for the United States to follow suit. Not only does the income tax grow more rapidly than local revenue sources, but inflation bears more heavily on labour-intensive local governments than on national governments whose expenditures are weighted toward transfers or purchase of manufactured products benefiting from productivity gains. The consequence of such tax-sharing would almost certainly be a somewhat larger public sector, by reason of the principle of public finance economics summarized as “money sticks where it hits.” That fact may make the change acceptable to at least some of the federal government’s client groups, and provides a fair trade-off for the disappearance of suffocating controls. [Treasury Secretary Albert] Gallatin’s report to Jefferson on needed transportation infrastructure bore some resemblance to today’s German ‘framework laws’, in which the national government defines broad objectives to be carried out by adequately financed provincial governments. In the early 19th century, the national government had not effectively pre-empted potential state revenue sources. That the subsequent development is not irreversible is suggested by modern Canadian experience, where the provinces are now accorded roughly three times the share of national income taxes than they received 50 years ago. The growing centralization which Americans take for granted is not an inevitable concomitant of modern life, but rather is largely a product of the civil rights movement and its political camp followers; since the Second World War, the movement in most Western democracies has been toward greater localism.
  2. State and local business tax structures are increasingly outmoded, complicated, and perverse. Taxes on profits and personal property burden manufacturers, who must retain earnings to improve plant, and fall lightly on service industries. Wider adoption of income Value Added Taxes (VATs), like the rather simple Business Enterprise Tax in New Hampshire, would alleviate this problem. These taxes are broad-based, and fall without exemption on payroll, dividends and retained profits. Their adoption would not only be a simplifying measure, but would benefit cities into which workers commute if used as a basis of local taxation or state-shared taxes.
  3. The mediocrity of our public schools, bound hand and foot by recruitment and compensation rules imposed by unions and testing and certification regimes imposed by state governments, has been recognized since the 1950s.The only cures being pressed are vouchers and charter schools, which involve not reform of what already exists but erection of entire new systems. Despite 20 years of controversy, the new panaceas account for barely one percent of high school enrollment. Britain, Australia, New Zealand, Denmark, Switzerland and several German lander have effectively made all schools charter schools, by giving each its building-level board.
  4. Various writers, including Robert Ellickson and Robert Nelson, have pointed to the need for ‘new institutions for old neighbourhoods’ by allowing voluntary organization of associations at the election precinct level, with limited assessment powers and the authority to construct improvements and organize services like day care and local transportation. French communes and to a lesser extent British parish councils with typical populations of less than a thousand provide such services. John Locke, John Winthrop and Thomas Jefferson all provided in their time for the free incorporation of new local instrumentalities. Joseph Pulitzer fostered the grant to municipalities of police powers, important in some areas with respect to issues like firearms control and alcoholic beverage control, where urban and rural sentiments are apt to diverge.
  5. The Japanese, with modest tax credits, have fostered the creation of old age clubs, realizing that at any given time most elders are not bed-ridden and welcome useful activity. These mutual aid organizations provide many social services. Several nations provide incentives to mutual aid among extended families by stimulating the creation of duplex, accessory, or ‘mother-in-law’ apartments in single-family housing. William Leggett’s general business corporations, Hugh Hammond Bennett’s soil conservation districts and Byron Hanke’s residential community associations are indebted to government only for the incorporation laws; it is largely private endeavor and private resources that makes them effective. This approach to fostering change has not lost its relevance.
  1. Grandiose reform proposals for health care have insured that many Americans have no health coverage at all. The prejudice against socialized medicine has resulted in neglect of Peter Drucker’s assessment of the voucher system for primary care in the British National Health Service: “The part that pays physicians for patients on their lists works extremely well…For standard medical care, government in the National Health Service is an insurance company. It reimburses the doctor who takes care of a patient. But the doctor does not become a government employee. Nor is the patient in any way limited as to what doctor to choose.” British primary care physicians at least until recently enjoyed more clinical freedom than their American counterparts, who must answer to multiple insurers with different practices and rules. The recent ‘Obamacare’ legislation does not change this. The ‘headright’ system of Locke, Winthrop and Jefferson giving rise to American settlement and the tuition grant system of the land-grant colleges and G.I. bill of rights similarly employ relatively uniform distribution mechanisms bearing little resemblance to discretionary project grants.
  2. Several nations have developed a method of urban renewal known as ‘land readjustment’.  Owners on a city block vote to cooperatively redevelop the block. Dissenting owner-occupiers are excused. Other dissenters, upon approval, have a right to be bought out at appraised value. The remaining owners organize, allocate shares by value, and award shares to a developer, usually the promoter of the plan. This avoids the delays of land acquisition, and is adaptable to inner-city slums. More than half the war-damaged real estate in Japan was restored using this device, which exploits the profit motive rather than running counter to it.
  3. Except for housing, American society in its lower reaches is not Disraeli’s ‘property-owning democracy.’ Savings rates are low, and the Bush scheme for partial privatization of social security and the Gore scheme for government matching of savings have disappeared in the manner of election-year gambits. Melding of these approaches seems possible, and the success of ambitious ‘forced savings’ schemes like that of Singapore suggests that modestly increased payroll taxation is politically acceptable if greater personal; autonomy and security results. The increasing movement toward individual 401(k) pension accounts, unknown in the 1950s and 1960s suggest that ‘interest-group’ liberalism does not erect an insuperable barrier to this sort of devolution.
  4. The much-vexed problem of illegal immigration also requires the association of benefits and obligations. Residence permits for the law-abiding might be conditioned on a substantial application fee or civil penalty of $5000, payable by the applicant, friends, families, employers, or charities, the billions thus raised being dedicated to the provision of nurse practitioners and police training in Central American countries. The nation’s moribund selective service boards of respected civic volunteers might be employed for the vetting of immigrants and the organization of settlement houses and language classes. Voting rights should be restored to state control, as Article I, sections 2 and 4 of the Constitution contemplate. Prior to the 1920s nearly two dozen states enfranchised some resident aliens and women’ suffrage spread gradually through the states for 50 years and may have been decisive in the re-election of Wilson in 1916, four years prior to ratification of the 19th Amendment.
  5. Similar notions of reciprocity of obligation underlay the youth employment [programs of the New Deal, most notably the Civilian Conservation Corps organized by General George Marshall, in which millions of young men, removed from their neighborhoods, received work-readiness training in exchange for unskilled labor on still-needed projects for soil conservation, flood control, reforestation, reclamation of mine sites, and the creation of new national parks and trails. Persons under the age of 25 might be excused from federal payroll taxation, an inexpensive measure since they earn little, a course recently adopted in Poland and Croatia and long accomplished in Germany and The Netherlands through the use of tax credits.

The unifying themes of these proposals are devolution, institution-building, and predictability. They are designed to supplant central government mandates, funded and unfounded; the almost incomprehensible recent federal education bill is the reductio ad absurdum of that approach. The view taken here is that of Tocqueville:

“Sometimes the centralized power, in its despair, invokes the assistance of  the citizens; it says to them: ‘You shall act just as I please, as much as I please, and in the direction which I please. You are to take charge of the details, without aspiring to guide the system; you are to work in darkness; and afterwards you may judge my work by its results.’ These are not the conditions upon which the alliance of the human will is to be obtained; it must be free in its style, and responsible for its acts, or (such is the constitution of man) the citizen had rather remain a passive spectator, than a dependent actor, in schemes with which he is unacquainted.”

Some of our proposals, to be sure, involve the use of state power, like all our benign examples. We have shown that the ‘conservatives’ in Congress and elsewhere who believe that all beneficial activity is private misread the lessons of our history. In   Willard Hurst’s words: “Not the jealous limitation of the power of the state but the release of individual creative energy was the dominant value,”  and our examples show how enlightened draftsmen can empower citizens. “If neighbourhoods are to become more important, new legal mechanisms are necessary to provide the requisite institutional support and foundation.”  “What the democrat asks is that just as few as possible of. . . rights be sealed apart from political life, just as many as  possible embedded in a majoritarian process. The rights themselves depend upon it. As recent events have demonstrated, those champions of individual rights who live by the judiciary die by the judiciary.” That implies much more localism than we now have.

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