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Does Technology Drive the Growth of Government?

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Part of the Studies in Public Choice book series (SIPC,volume 40)

Abstract

I consider technology as a partial explanation of the historical shift towards big government. The late nineteenth century and early twentieth century saw a fundamental change in the production technology for large government, and for large institutions more generally. Large institutional structures require a certain degree of communications, organization, and coordination. Only in the late nineteenth century did these structures become possible and big government was one result of that expansion of the production possibilities frontier.

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Notes

  1. 1.

    This chapter contains Excerpt(s) from “The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better” by Tyler Cowen, copyright Ⓒ2011 by Tyler Cowen. Used by permission of Dutton, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC. All rights reserved.

  2. 2.

    This point does not suggest that all intellectuals cynically court power. Many changed their minds sincerely, due to some change in objective conditions. Or perhaps few individuals changed their minds, but some change in objective conditions caused socialists to win larger audiences at the expense of classical liberals.

  3. 3.

    Along these lines, Husted and Kenny (1997), looking at data from state governments, find that the elimination of poll taxes and literacy tests leads to higher turnout and higher welfare spending. Lott and Kenny (1999) find that women’s suffrage had some role in promoting greater government expenditures. Internationally, we observe that the relatively free Hong Kong was ruled by a British mandate for much of the twentieth century, rather than having democracy.

  4. 4.

    Finer (1997a,b) first suggested that technology was behind the rise of big government, though he did not consider this claim in the context of public choice issues. DeLong’s (2019) unpublished manuscript, “Slouching Towards Utopia,” appears to cover related themes.

  5. 5.

    On the rail numbers, see Warren (1996). On the growth of large rail companies, see Chandler (1965).

  6. 6.

    On U.S Steel, see Chambers II (1982). On the canals, see Chandler (1965).

  7. 7.

    On Botswana, see The Economist (2002).

  8. 8.

    Yglesias (2009) wrote an interesting blog post on related ideas.

  9. 9.

    Openness does appear to help some countries, such as New Zealand. External constraints forced them to reform in the 1980s, if only to stave off disaster. Furthermore, in historical terms, competition between European governments played a critical role in encouraging liberalization and spurring the industrial revolution. Nonetheless, in today’s world, the degree of economic openness, all other things held equal, predicts more intervention rather than greater liberty.

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Acknowledgements

Paper originally prepared for 2009 meeting of the Mont Pelerin Society in Stockholm Sweden. The author wishes to thank Pete Boettke, Mark Brady, Bryan Caplan, Paul Edwards, Jeff Friedman, Mark Grady, Wendy Gramm, Robin Hanson, Robert Higgs, Jeff Hummel, Laurence Iannaccone, Daniel Klein, Brian Mannix, Alex Tabarrok, Gordon Tullock, Tony Woodlief, and GMU seminar participants for useful comments.

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Cowen, T. (2021). Does Technology Drive the Growth of Government?. In: Hall, J., Khoo, B. (eds) Essays on Government Growth. Studies in Public Choice, vol 40. Springer, Cham. https://doi.org/10.1007/978-3-030-55081-3_3

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