The tragedy of our democracy is summarized in the observations of Paul O’Neil, a former deputy director of one of our federal government’s most powerful agencies, the Office of Management and Budget. The story is recorded in New York Times reporter Charles Duhigg’s recent bestseller The Power of Habit. O’Neil, who later became an outspoken Treasury secretary in the George W. Bush administration, found out after many years in Washington that “the government’s efforts, which should have been guided by logical rules and deliberate priorities, were instead driven by bizarre institutional processes. … Bureaucrats and politicians, rather than making decisions, were responding to cues with automatic routines in order to get rewards such as promotions and reelection.”
O’Neil’s story is so intriguing because he was so unlike his colleagues in government. For one thing he was a natural economist. The guy had a knack for asking the right questions, considering the secondary effects, and tracing the problems to their root causes. While working on analyses of federal spending on healthcare, O’Neil decided to find out why the wealthiest nation on earth had infant mortality rates that exceeded those of much poorer countries. In the process he discovered that most infant deaths were caused by premature births in rural areas. He dug deeper and found a link between a mother’s diet and premature births.
O’Neil was able to figure out that the solution would be in better nutrition education for women before they became sexually active. While trying to improve the high school curricula, he found out that teachers in rural areas didn’t know enough basic biology. After years of fighting to overcome bureaucratic inertia, O’Neil persuaded his superiors that colleges preparing teachers should emphasize biology and nutrition. After that, infant mortality rates in the United States fell by 68 percent. If only there was a way for our democracy to elevate to government offices more people who had mastered the economic way of thinking about our social problems.
Some time ago, the Intercollegiate Studies Institute gave a civic literacy test to 2,508 Americans. It contained 33 questions on the republic’s founding principles, political history, international relations, and market economy. Seventy-one percent of the participants failed the test. The average score was just 49 percent. Less than half were able to name all three branches of their government. Such ignorance among the populace allows incompetent and corrupt people to rise to the top of our government and bureaucracy.
Providentially, we have a mechanism that is able to balance most of the American democracy’s imperfections. It is called “the market.” Around the time O’Neil was leaving Washington for a much more productive career in the private sector, a Scottish immigrant in America published a short work titled “Nine Lies About Capitalism.” One of the myths examined in Madsen Pirie’s essay concerns decision-making in the marketplace and that will be the topic for next week’s column.