H-B: REVIEW: Rise of Big Government in U.S. (fwd)

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Forwarded message:
> Date:         Sat, 10 Jan 1998 07:47:17 +0000
> From: "K. Austin Kerr (by way of Richard Jensen
>               <h4900@xxxxxxxxxxxxxxx>)" <akerr@xxxxxxxxxxxxxxxxxxxxxxxxxx>
> Subject:      H-B: REVIEW: Rise of Big Government in U.S.
> To: SOCIAL-CLASS@xxxxxxxxxxxxxxxx
> ================= H-BUSINESS POSTING =================
> EH.NET BOOK REVIEW
> Published by EH.NET (January 1998)
>
> John F. Walker and Harold G. Vatter, _The Rise of Big Government in the
> United States_.  Armonk, NY: M.E. Sharpe, 1997.  256 pp.   $64.95 (cloth),
> ISBN: 0765600668 .  $24.95 (paper), ISBN 0765600676.
>
> Reviewed for EH.NET by Werner Troesken, Department of History, University
> of Pittsburgh, <troesken+@xxxxxxxx>
>
>      In _The Rise of Big Government in the United States_, John F. Walker
> and Harold G. Vatter argue that government growth is response to the
> evolution of the market, shifts in ideology, and changes in international
> relations.  Although Walker and Vatter document the growth of local and
> state governments, they focus mainly on the growth of the federal
> government.  Their story begins in 1890 and extends through the present.
> Walker and Vatter take issue with two common explanations for the rise big
> government.  First, they claim that economic and political crises have not
> caused the size of government to ratchet upward, as Robert Higgs argued in
> _Crisis  and Leviathan: Critical Episodes in the Growth of American
> Government_ (New York, 1987).  Second,  they  claim that  government
> bureaucrats seeking to maximize their own power and wealth have not
> prompted the rise of big government, as William Niskanen argued in
> _Bureaucracy and Representative Government_ (Chicago, 1971).
>
>      For Walker and Vatter, government growth is primarily a response to
> the vagaries and failures of the market.  In a nutshell, when the market
> generates outcomes that society does not like, society demands that the
> government intervene and make things better.  The government's ability to
> solve the problems wrought by the market depends critically on the larger
> culture's ideological make-up.  In eras dominated by a laissez-faire
> ideology, the government grows less, and is less successful in dealing with
> the problems generated by the market.
>
>      Although Walker and Vatter are both economic historians, they chose
> not to consider much recent work in economic history.  Consider two
> examples.  The authors argue that federal deposit insurance has stabilized
> the banking industry and protected small depositors.  In making this
> argument, Walker and Vatter do not refer to numerous articles by Charles
> Calomiris, David Wheelock, and Eugene White.  The works of Calomiris,
> Wheelock, White, and others, highlight the moral hazard and adverse
> selection problems that have plagued deposit insurance schemes throughout
> history.  Walker and Vatter also argue that since World War II, fiscal
> policy has stabilized the macroeconomy and prevented severe downturns.
> Their discussion would have been better had they addressed Christina
> Romer's work on pre- and post-war business cycles.
>
>      Overall, Walker and Vatter tell a plausible story, though I would have
> preferred a more balanced analysis, one that identified the costs, as well
> as the benefits, of big government.  Readers wanting an introduction to the
> rise of big government, or those wanting an account that emphasizes the
> benefits of big government,  will probably find this a useful book.  Those
> wanting a more thorough or balanced account should look elsewhere.
>
> Werner Troesken
> Department of History
> University of Pittsburgh
>
> Werner Troesken is author of _Why Regulate Utilities? The New Institutional
> Economics and the Chicago Gas Industry, 1849-1924_ (University of Michigan
> Press, 1996).
>
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