We're Spendthrifts-And We Like It That Way: Wildavsky

Chapter 10: A Cultural Theory of Governmental Growth and (Un)Balanced Budgets

W&W seek to answer the related questions of Why does government grow?, Why are budgets so seldom balanced?, and Why has expenditure control collapsed in the West? After erecting several straw men they arrive at a cultural explanation.

Competing Theories in Brief

Over the decades several theories have been introduced to explain why budgets grow:

ÅE Wagner's Law of Increasing State Activity

The first important effort to explain why expenditures tend to grow faster than the economy. The argument here is that the governments of developed nations spend more because they do more. Urbanization, Wagner asserted, causes tensions which will have to be ameliorated. Governments will need to provide public goods, like mass transit, that the private sector will be unable or willing to furnish.

ÅE Wilensky's Law

Richer nations spend more, because they have more to spend.

ÅE Marxist Approaches

Capitalism saves itself by spending heavily of welfare services, by "buying" social order.

ÅE Tax Hypotheses

Crises expand public tolerance for higher levels of taxation and spending expands to use up available revenues. No doubt, but why? ask W & W. Certainly the effect of crises makes it easier to sustain higher tax rates, one must still explain why this is considered preferable to lowering taxes to their original limits.

Other explanations range from interest group activity to demographic changes.

W&W take either theoretical or empirical exception with each. They posit, as an alternative, a cultural theory which basically asserts that if we spend more it's because we want to spend more. They cite the emergence of what they term sectarianism, which has its roots among alienated intellectuals. These social critics, products of the growing affluence of Western nations, wanted government to do more to eliminate inequality but were not willing/able to financially support it. Affluence leads to the denigration of the profit motive on which that affluence rests. Thus, as revenues increase, so do social sympathies and the convict that such amelioration should be underwritten by the wealthy (in the form of government spending of their tax dollars). For W& W, it is the rise of "sectarian" political cultures, with their passion for the equality of condition, that best explains the continuous increase in the size of government" (583).

Sectarianism is one three political cultures, or regimes, present in Western society. Each implies a different approach to social spending. Hierarchical regimes justify inequality on grounds that it specialization and division of labor enable people to live together with greater harmony and effectiveness than do alternative arrangements. There is a sacrificial ethic at work, the parts are supposed to sacrifice for the whole. According to W&W this explains the mild distributive of governments in societies with strong hierarchies. Market regimes, with their individualist focus, produce spending strategies that involve both minimal taxation and expenditure Sectarianism, in contrast, is committed to a life of purely voluntary association which is impossible with equality of condition. Thus sectarians favor redistributive policies (multiple cultures-sound familiar? Wildavsky was one of Thompson's co-authors).

If government spending has risen in both Europe and the U.S. it is because sectarian elements have become more influential, giving the dominant hierarchical (in the case of Europe) and the market (here in the U.S.) cultures a run for their money (quite literally).

The empirical support that W&W offer is in the form of data indicating that the biggest increase in spending has been in the social welfare area. Expenditures have risen only modestly in most other areas, and defense spending has actually declined.

The key to balanced spending, according to W&W? Balanced government, power sharing between the cultures/regimes.