I visited with Richard Cornuelle last Monday. I have written before about how influential Cornuelle has been in my life and my work. Cornuelle was Mises's research assistant at NYU in late 1940s, and he then worked at FEE and with the Volker Fund. He is the author of many brilliant articles and books, focusing primarily on the role of non-market yet voluntary civil society, and the possibility of decentralized and non-hierarchical forms of business enterprise and entrepreneurship. He also has a better understanding of the destructive influence of the "progressive" movement than anyone I have ever met.
During my visit, Dick gave me a copy of his book, Healing America: What Can Be Done About the Continuing Economic Crisis (1983). Ironically, this is the one book of Dick's I had not previously read. But as with Reclaiming the American Dream and De-Managing America, this book is full of brilliant insights and wonderfully written.
I particularly was struck by these paragraphs written in the context of the late 1970s early 1980s:
"The proposed fiscal prohibitions all represent some sound principle. Government should not habitually monetize debt; government should not tax destructively; government should not grow so large as to crowd out the possibility of collective action outside of government."
"But these proposals are not cures; they are tardy preventatives masquerading as cures. They may become practical after we have solved the problem, after the role of government has been reduced to a manageable dimension. The enactment of such reforms could someday be one result of restoring institutional balance, but they could not bring that restoration about."
"Caps of whatever kind, put in place before the source of the fiscal pressure is confronted and relieved, will simply put new pressure on a system that is already showing serious signs of strain. ..."
"But these debates are premature. Such constraints made sense before Americans came to depend on government for essentials it cannot deliver. They may make sense again when these elemental dependencies have been corrected. But now it is both too late and too soon for them. Or, to reverse one of Lord Keynes' aphorisms, we cannot get thin by buying a smaller belt."
These paragraphs can be found on pp. 116-117 of Healing America in a chapter entitled "The Unmanageable State." And to me they hit not only the supply side of government, but also the demand side. In my opinion, only James Buchanan's "Afraid to Be Free" and Vincent Ostrom's The Meaning of Democracy and the Vulnerability of Democracies address this issue with the same profound understanding as Cornuelle.
I have repeatedly stressed on this blog the problem of deficits, debt and debasement and the need to identify the destructive policy cycle and to find institutional constraints to curb this natural proclivity of democratic politics. But Cornuelle is right, we don't get thin by buying a smaller belt. We have to address that demand side which puts expectations on what government is supposed to deliver for us. This is a deeper cultural battle that we economists may in fact be ill-equipped to fight. But we must.