Saturday, July 31, 2010

Sickness of Government: Has Anything Changed in the Last 42 Years?

In 1968, Peter F.Drucker, father of modern management, wrote The Age of Discontinuity: Guidelines to Our Changing Society (Harper and Row). His theme was: The nature of society has fundamentally changed. We no longer trust government to perform. We have become a global shopping center and an information and knowledge economy driven by the computer. Government is too big, cumbersome, and inefficient to provide for or protect its citizens.

As I review today’s average national poll numbers, I get a sense of déjà vu.

Obama job performance
Spread -4.6%

Congressional Job Approval

Spread -51.0%

Direction of Country
Right Direction
Wrong Track
Spread -28.7%

Apparently, the more times change, the more they remain the same.

The following quotes are from Drucker’s chapter “The Sickness of Government” in his book.

Drucker’s comments call to mind that old chestnut, “He who ignores history is doomed to repeat it.” His remarks also raise these questions. Has the capacity of government to change society for the better really changed? Is government capable of doing things right for everyone? Can government, among other things, manage a vast pluralistic health system, which now consumes 17% of GDP, without increasing costs, creating a huge bureaucracy, rationing care, and decreasing quality. Can government do so without demoralizing physicians by turning them into underpaid 40 hour a week civil servants?

History will tell if government is up to the job.

Drucker Quotes

Of attitude towards government

Now our attitudes are in transition. We are moving to doubt and distrust of government.

Of illusions of the educated and intellectuals

Once the “wicked private interests” have been eliminated, the right course of action will emerge, and decisions will be rational and automatic. Private business and profits are bad – ergo, government ownership must be good.

Of “free” health care and taxing the rich

The British in adopting the “free health service” believe that medical care would cost nothing. All the health service is and can be is, of course, “prepaid” health care. Nurses, doctors, hospitals, drugs and soon have to be paid by somebody. But everybody expected this “somebody” to be somebody else. At the very least, everyone expected that under a “free” health service the taxes of the rich would pay for the health care of the poor. There are, of course, never enough rich people to carry the burden of any general service.

Of government performance

The greatest factor in the disenchantment with government is that government has not performed. Government has proved itself capable of doing only two things with great effectiveness. It can wage war. And it can inflate the currency.

Of government and the welfare state

The best we get from government in the welfare states is competent mediocrity. What is impressive is the administrative incompetence. Every country reports the same confusion, the same lack of performance, the same proliferation of agencies, of programs, of forms, and the same triumph of accounting rules over results.

What is difficult for government

Certain things are difficult for government. Being by nature a protective institution, it is not good at innovation. It can never really abandon anything. The moment government undertakes anything, it is entrenched and permanent. Every beneficiary of a government program immediately becomes a” constituent.”

Of government and management

Government is a poor manager. It is, of necessity, concerned with procedure, for it is also, of necessity, large and cumbersome. It must administer public funds and must account for every penny. It has no choice but to become “bureaucratic.”Every government is, by definition, a “government of forms.” This means high costs. For “control” of the last 10 percent of phenomena always costs more than control of the first 90 percent.

Of what is needed in government

What we need in a pluralistic society is not a government that “does”. It is not a government that “administers,” It is a government that governs.


Only history will tell if government is up to the job. History is not optimistic.


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