Big Government: Born in Crisis and Built to Last

Nobel Prize-winning economist Milton Friedman famously said, “Nothing is so permanent as a temporary government program.” Friedman’s statement, clear and to the point, is supported by a mountain of evidence. From extended unemployment and crop insurance to deposit insurance and mass income tax withholding, these are but a few “temporary” programs that traded their provisional status for permanency.

Each of these examples, as well as many others, has something else in common. That is, each was born because of crisis. From economic recessions to war, policies and programs begun in the name of combating today’s threats have a unique way of staying long after the crisis has passed.

This phenomenon is not a relic of centuries past, but one that remains wholly relevant today.

President George W. Bush, for example, authorized the use of military commissions for certain terrorism suspects in the wake of 9/11. These emergency-born commissions created a parallel system in which military officers—not civilian judges and juries—would prosecute and adjudicate under rules that gave government officials significant latitude over evidence, information, courtroom procedure, and defendant participation in their own trials.

Other contemporary examples are readily apparent—particularly in the context of the war on terror. Consider Congress’s Authorizations for Use of Military Force, or AUMFs, that established a statutory basis for counterterrorism military operations outside of conventional warfare. Though initially used to support the invasions of Iraq and Afghanistan, these emergency institutions continue to be used a full quarter century later. Other examples abound, including many emergency surveillance provisions in the USA PATRIOT Act.

Whether the Great Depression, World War II, or the Global War on Terror, the creation of these and other policies invoked the need for extraordinary measures in the face of an “extraordinary emergency.” Though the emergencies that birthed them are long in the past, the programs and system persist.

This raises an important question: why are emergency programs so easy to create and yet so difficult to dismantle? The question of expansion is easy. In a crisis, citizens often call for elected officials to “do something.” This leads to the expansion of government’s size and authority.

But why are “emergency” government measures so likely to become permanent? The answer is threefold.

First is the set of incentives policymakers face. Economics teaches us that elected officials are motivated by three goals: political survival, reelection, and legacy. They evaluate policy alternatives according to their expected payoffs along these margins. With many policies, the payoffs point directly toward expansion. Politicians are likely to be substantially blamed if they roll back security policies and then another attack occurs, or if they fail to act in a recession and economic conditions worsen. At the same time, maintaining the status quo carries little to no cost. Elected officials can also claim credit for effective policies or frame their support for expansion as a commitment to being on “the cutting edge” of security.

The second reason why emergency changes tend toward permanency relates to the economics of bureaucracy. Once created, bureaucracies face strong incentives to expandtheir budgets, personnel, and perceived importance. Elected officials who oversee these agencies face severe impediments. This is partly because, although bureaucrats are experts in their fields, the overseers are not. As a result, Congress or other oversight bodies must often rely on the bureaucrats themselves for information about the efficacy and relative success of programs. Moreover, bureaucrats often have significant discretion over what, when, and how they report to policymakers.

The third factor that transforms “temporary” measures into permanent fixtures relates to special interests. With the creation of emergency measures, private contractors come to have a stake in maintaining them. Examples abound. In the context of counterterrorism in the post-9/11 period, for example, scholars have highlighted how an entire “terrorism industry” grew up around the U.S. government’s post-9/11 policies. We find similarly strong interests in banking, agriculture, and a host of other contexts.

Independently, these factors point toward the long life expectancy of emergency changes. Taken together, they represent a profound force for continuity and expansion.

So, what can be done? The solution is tough, but necessary: don’t create the measures in the first place. While crises prompt calls for immediate government action, we should do the exact opposite. As Nobel laureate economist F.A. Hayek noted, crises are precisely when constraints on government matter most.