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Book Review: 'The Fourth Revolution' by John Micklethwait and Adrian Wooldridge
If bloated Western states don't slim down, the appeal of more innovative authoritarian regimes, notably in Asia, could increase.
By GEORGE WALDEN
May 29, 2014 7:12 p.m. ET
11 COMMENTS
Over the past half-millennium, successive revolutions in the functions and role of the state have helped make Europe and America the primary drivers of progress in the world. Yet the authors of "The Fourth Revolution" deliver a stark warning: If the state is not radically reformed and reduced, Western democracy could suffer, and the appeal of more innovative authoritarian regimes, notably in Asia, could increase.
The two British writers delivering this prophecy to the West are the editor in chief of the Economist, John Micklethwait, and its management editor, Adrian Wooldridge. Clear where they stand politically—liberals but not libertarians, right-of-center though decidedly not neoconservative—the two lead the reader on a brisk trot through the origins and evolution of the state.
According to the authors, three groups of revolutionaries got us where we are today: Thomas Hobbes, the 17th-century philosopher of the nation-state and sovereign power; John Stuart Mill and various 18th- and 19th-century thinkers on the liberty of the individual; and, finally, the pioneers of the welfare state, personified by the top-down social reformism of England's Beatrice Webb. A well-born believer in eugenics, Webb was, like all social systematizers, not given to self-doubt: "The cleverest member of one of the cleverest families of the cleverest class of the cleverest nation in the world" was her self-description. She worked tirelessly on systems of poor relief, but her statist enthusiasms—she was a Stalin apologist at the height of the Moscow trials—proved a poisoned legacy.
Yet it was not just shining-eyed socialists who encouraged the growth of what the French call the providential state. In Britain, patrician Tories like Prime Minister Harold Macmillan were partisans of big government. Even Margaret Thatcher declined to tackle the corporatist legions in state education and the National Health Service. After 11 years of her government, social spending as a proportion of GDP was 22.2%, as opposed to 22.9% when she began. Here I would add a personal note: As higher education minister under Thatcher, I witnessed the furious resistance of the undergraduates of Oxford and Cambridge to the introduction of student loans—they preferred poorer people to pay for their elite education—and can attest to how hard it is to pry acquired rights from the sticky hands of favored classes.
In America, every president from FDR to George W. Bush contributed in some way to the bloated state. Ronald Reagan failed to win legislative approval for the spending cuts that might have balanced his tax cuts, thus producing a soaring deficit, and today the U.S. is skewed by spending on the elderly and by middle-class tax deductions. More rights, fewer taxes, goes the collective cry, as longevity and insecurity sharpen the crisis of entitlements. Clearly Europe has no monopoly on out-of-control spending: a French train driver can retire at 50, but in California you can find prison guards making $100,000 a year with 90% pensions, and Obamacare seems set to rival European levels of bureaucracy.
The state must take a haircut, "The Fourth Revolution" argues, as must public entitlements, to ensure that they are directed to those who need them. But the personal tax system must also cease to be slanted toward the rich, and time-honored subsidies to big corporations with crony connections to government must also go—along with the army of lobbyists who angle for them. "Uncle Sam is a closet state capitalist," the authors writer, and there must be more privatization: Amtrak, post offices, the Tennessee Valley Authority, state-owned agricultural land—all of it must go.
Yet Messrs. Micklethwait and Wooldridge find room for hope. For a model of how slimmed-down government can become healthier government, they look to the example of Sweden, where it took the 1991 collapse of the banking system to achieve radical cuts in spending and new means of delivering services. As public spending fell to 49% of GDP from 67%, Sweden went from an extreme example of unsustainable welfarism to an affordable halfway house. The authors also, with reservations, put forward the example of Singapore ("Disneyland with the death penalty, paradise designed by McKinsey"). This is a state with levels of self-discipline that Anglo-Americans are not going to reach and a brand of authoritarianism we would never tolerate. Yet there are lessons for the West, notably a system of social insurance rather than social assistance and methods of attracting meritocratic elites into the civil service, so that what the state has to do it can do well.
Yet if a drastic reduction of the state was too much for Reagan and Thatcher, who is going to do it? A fourth revolution would require not just inspired political leaders but top-class public officials. Tax adjusting, entitlement slashing and the farming out of state functions to the private sector are more a massive administrative chore than a glorious revolution. The authors recognize the problem: "Perhaps the most dangerous effect of all this gridlock, buffoonery and bile is to scare away talent from the public sector." They might have quoted the French poet Charles Baudelaire, who described all officials as "the domestic servants of the public."
This book's message is simple but severe: If the state promises too much to too many, cynicism grows, and democracy is damaged. Unless the ballooning state is punctured, there is a risk that our wealth will shrivel and our power will decrease while more focused and less democratic regimes grab the baton.
Mr. Walden, a former diplomat and minister for higher education under Margaret Thatcher, is the
author of "China: A Wolf in the World?
Book Review: 'The Fourth Revolution' by John Micklethwait and Adrian Wooldridge
If bloated Western states don't slim down, the appeal of more innovative authoritarian regimes, notably in Asia, could increase.
By GEORGE WALDEN
May 29, 2014 7:12 p.m. ET
11 COMMENTS
Over the past half-millennium, successive revolutions in the functions and role of the state have helped make Europe and America the primary drivers of progress in the world. Yet the authors of "The Fourth Revolution" deliver a stark warning: If the state is not radically reformed and reduced, Western democracy could suffer, and the appeal of more innovative authoritarian regimes, notably in Asia, could increase.
The two British writers delivering this prophecy to the West are the editor in chief of the Economist, John Micklethwait, and its management editor, Adrian Wooldridge. Clear where they stand politically—liberals but not libertarians, right-of-center though decidedly not neoconservative—the two lead the reader on a brisk trot through the origins and evolution of the state.
According to the authors, three groups of revolutionaries got us where we are today: Thomas Hobbes, the 17th-century philosopher of the nation-state and sovereign power; John Stuart Mill and various 18th- and 19th-century thinkers on the liberty of the individual; and, finally, the pioneers of the welfare state, personified by the top-down social reformism of England's Beatrice Webb. A well-born believer in eugenics, Webb was, like all social systematizers, not given to self-doubt: "The cleverest member of one of the cleverest families of the cleverest class of the cleverest nation in the world" was her self-description. She worked tirelessly on systems of poor relief, but her statist enthusiasms—she was a Stalin apologist at the height of the Moscow trials—proved a poisoned legacy.
Yet it was not just shining-eyed socialists who encouraged the growth of what the French call the providential state. In Britain, patrician Tories like Prime Minister Harold Macmillan were partisans of big government. Even Margaret Thatcher declined to tackle the corporatist legions in state education and the National Health Service. After 11 years of her government, social spending as a proportion of GDP was 22.2%, as opposed to 22.9% when she began. Here I would add a personal note: As higher education minister under Thatcher, I witnessed the furious resistance of the undergraduates of Oxford and Cambridge to the introduction of student loans—they preferred poorer people to pay for their elite education—and can attest to how hard it is to pry acquired rights from the sticky hands of favored classes.
In America, every president from FDR to George W. Bush contributed in some way to the bloated state. Ronald Reagan failed to win legislative approval for the spending cuts that might have balanced his tax cuts, thus producing a soaring deficit, and today the U.S. is skewed by spending on the elderly and by middle-class tax deductions. More rights, fewer taxes, goes the collective cry, as longevity and insecurity sharpen the crisis of entitlements. Clearly Europe has no monopoly on out-of-control spending: a French train driver can retire at 50, but in California you can find prison guards making $100,000 a year with 90% pensions, and Obamacare seems set to rival European levels of bureaucracy.
The state must take a haircut, "The Fourth Revolution" argues, as must public entitlements, to ensure that they are directed to those who need them. But the personal tax system must also cease to be slanted toward the rich, and time-honored subsidies to big corporations with crony connections to government must also go—along with the army of lobbyists who angle for them. "Uncle Sam is a closet state capitalist," the authors writer, and there must be more privatization: Amtrak, post offices, the Tennessee Valley Authority, state-owned agricultural land—all of it must go.
Yet Messrs. Micklethwait and Wooldridge find room for hope. For a model of how slimmed-down government can become healthier government, they look to the example of Sweden, where it took the 1991 collapse of the banking system to achieve radical cuts in spending and new means of delivering services. As public spending fell to 49% of GDP from 67%, Sweden went from an extreme example of unsustainable welfarism to an affordable halfway house. The authors also, with reservations, put forward the example of Singapore ("Disneyland with the death penalty, paradise designed by McKinsey"). This is a state with levels of self-discipline that Anglo-Americans are not going to reach and a brand of authoritarianism we would never tolerate. Yet there are lessons for the West, notably a system of social insurance rather than social assistance and methods of attracting meritocratic elites into the civil service, so that what the state has to do it can do well.
Yet if a drastic reduction of the state was too much for Reagan and Thatcher, who is going to do it? A fourth revolution would require not just inspired political leaders but top-class public officials. Tax adjusting, entitlement slashing and the farming out of state functions to the private sector are more a massive administrative chore than a glorious revolution. The authors recognize the problem: "Perhaps the most dangerous effect of all this gridlock, buffoonery and bile is to scare away talent from the public sector." They might have quoted the French poet Charles Baudelaire, who described all officials as "the domestic servants of the public."
This book's message is simple but severe: If the state promises too much to too many, cynicism grows, and democracy is damaged. Unless the ballooning state is punctured, there is a risk that our wealth will shrivel and our power will decrease while more focused and less democratic regimes grab the baton.
Mr. Walden, a former diplomat and minister for higher education under Margaret Thatcher, is the
author of "China: A Wolf in the World?
Book Review: 'The Fourth Revolution' by John Micklethwait and Adrian Wooldridge
