Don’t put it past Congress to tack a public option onto the defense spending bill. Or at least use earmarks in the bill as bargaining chips.

FEE Timely Classic:
“Legal Plunder Mislabeled ‘Defense’” by Sheldon Richman

President Barack Obama’s ban on earmarks in the $825 billion economic stimulus bill doesn’t mean interest groups, lobbyists and lawmakers won’t be able to funnel money to pet projects.They’re just working around it — and perhaps inadvertently making the process more secretive….The result, as The Associated Press learned in interviews with more than a dozen lawmakers, lobbyists and state and local officials, is a shadowy lobbying effort that may make it difficult to discern how hundreds of billions in federal money will be parceled out.”‘No earmarks’ isn’t a game-ender,” said Peter Buffa, former mayor of Costa Mesa, Calif. “It just means there’s a different way of going about making sure the funding is there.”

–Associated Press, Jan. 26

During the first six years of the George W. Bush administration, government domestic spending has increased by 27 percent in real terms. Domestic discretionary (non-entitlement) spending has grown at an real annual rate of 4.5 percent over these six years, compared to 2.1 percent per year under Bill Clinton. Indeed, President Bush has been the biggest big spender since Lyndon Johnson and his Great Society policies of the 1960s.

Furthermore, government’s intrusiveness in the social and economic life of the country has also gone up dramatically. Bush and a Republican Congress enacted the Medicare prescription-drug benefit, the largest new entitlement program since President Johnson signed the Medicare bill four decades ago. Bush also expanded the tentacles of federal control over education by pushing No Child Left Behind, which promises more and more regulation and national standards imposed by Washington. Federal spending on education has increased by more than 50 percent; the Department of Education budget has gone up from $33.6 billion in 2001 to $51.1 billion today.

A Republican Congress happily passed bill after bill that increased the spending on a pork barrel full of programs to benefit every conceivable special-interest group. The most notorious are “earmarks,” which target money for particular states and designated constituents. The corruption scandals of the last few years have merely been the tip of the iceberg of a Republican congressional mentality that nothing was more important than reelection and power.

In his new book, Leviathan on the Right, Cato Institute policy analyst Michael D. Tanner details the degree to which the Republicans in charge of Congress from 1995 through 2006 were drawn into the vortex of political plunder and abuse. That politicians, regardless of their ideological labels, take advantage of political office is nothing new. Eighty years ago, Austrian economist Ludwig von Mises pointed out that “Even [classical] liberal politicians, on gaining power, have usually relegated their liberal principles more or less to the background. The tendency . . . to abuse political power . . . is too deeply ingrained in the mentality of those who control the government apparatus of compulsion and coercion for them ever to be able to resist it voluntarily.”

What Tanner tries to explain is why the American political party that claimed to defend individual freedom and limited government over the last 70 years has seemingly turned its back on those ideas. The essence of this story is the transformation of American conservatism into what has become known as neoconservatism. Tanner points out that before World War II American conservatism was really classical liberalism. But after the war, the anti-statist movement was made up of two distinct strands of thought: libertarianism, which continued to uphold the classical-liberal banner, and a reconstructed conservatism that emphasized tradition, was suspicious of policy based on reason alone, and adhered to a religious foundation for liberty.

At the same time, however, there was slowly emerging a different brand of political thought that now bears the label “neoconservative.” Its founders included Sidney Hook, Lionel Trilling, Irving Kristol, Gertrude Himmelfarb, and Daniel Bell. They had been Trotskyite Marxists who opposed Stalinism in the 1930s and 1940s. In the postwar period they concluded that Stalinism was an inescapable part of Marxism and became vocal anticommunists.

Another group, including Norman Podhoretz, Midge Decter, Harry Jaffa, Allan Bloom, Paul Wolfowitz, and Robert Kagan, were all influenced by classical philosopher Leo Strauss of the University of Chicago. Strauss believed that rationalism and liberalism had undermined the foundations of traditional Western civilization and had opened the floodgates to the barbarism of Nazism and communism. Strauss rejected classical liberalism and free-market capitalism because they supposedly fostered a rootless individualism and pandered to the baser material desires of man. Civilization required a renewal of the classical Greek ideals of virtue, the heroic, and the notion of a higher collective calling. The means for restoring the virtuous society was a strong government that inculcated the appropriate values among the citizenry.

Religion was essential, too, because it gave man a sense of a divine meaning to life and provided the Archimedean point to justify the belief in universal truths. But what if “God is dead”? Still, the masses must be made to believe God exists, otherwise chaos and destruction will be man’s fate. If Marx had considered religion to be a harmful “opiate of the masses,” the Straussians considered it a useful and necessary narcotic.

Furthermore, these two strands of modern neoconservatism were not, in principle, against the welfare state. True to their earlier socialist roots, many of them considered it the duty and responsibility of the government to provide essential “social safety nets” since these could not and should not be left to the uncertainties and amorality of blind market forces. The neoconservative critique of the welfare state, beginning in the 1960s and 1970s, was based on the idea that in its current form political paternalism undermined the ethics of family, work, and personal responsibility that are essential to social stability. What was needed was reform of the welfare state but not its repeal. The state should be used to create the “right” incentives to get people to develop the “correct” behavioral characteristics.

For these reasons, Tanner argues that modern American liberalism and neoconservatism are both ideologies of state manipulation of human conduct. Their differences merely concern a vision of the good society that activist government policy should try to create, and the regulatory and interventionist means to bring it about.

Another element of neoconservatism, represented by William Kristol and David Brooks, is what Tanner calls “national-greatness conservatives.” They reject the notion that in the free society each individual should find his own purpose and meaning to life and that those who share beliefs should associate and advance their private visions through the voluntary institutions of civil society. These neoconservatives believe that Americans must be made to share and work for common national objectives to give them a sense of united community through government projects and propaganda—at taxpayers’ expense, of course.

Tanner also explains how the neoconservatives have come to make common cause with the religious right in America. Even though many neoconservatives are non-Christians, indeed sometimes agnostics or atheists, they have aligned themselves with a variety of conservative Christian policies that require government restriction on free-market activities. Here we see the Straussian emphasis on the need to inculcate religious ideas, even if those who do the inculcating do not personally believe in them.

For Tanner it is not surprising that the last six years have seen such an explosion in government spending and power. Not only was this nearly inevitable when one party came to control both the executive and legislative branches of government, but it was also reinforced and indeed fostered by a neoconservative ideology that has turned its back on the traditional American conservative ideals of limited government and individual freedom. The task in the years ahead, Tanner says, is to return conservatism to its original roots and away from this neoconservative mutation.

As the saying goes, our biggest problems are not what we don’t know, but what we think we know that isn’t so. One day I looked up the data to find out just how much money federal, state, and local governments spent subsidizing highways. I was stunned to learn: 

• The Interstate Highway System was built without a dime of subsidy, being funded entirely with gas taxes and other highway-user fees; 
• For the last 60 years virtually no federal money and very little state money other than highway-user fees have been spent on any highways or roads; 
• Cities and counties, however, do spend property, income, and sales taxes subsidizing new local roads and street maintenance; 
• But these subsidies are partly offset by diversions of federal and state highway-user fees to mass transit and other nonhighway programs; 
• Bottom line: user fees cover nearly 90 percent of the total amount spent on highway construction, maintenance, and operations. 

In 1919 my home state of Oregon was the first state to dedicate a gasoline tax to highways, roads, and streets. At that time gas taxes cost less to administer than toll roads and as a user fee they seemed to be just as fair. By 1932, when Congress dedicated the first federal gas tax to roads, every other state had followed Oregon’s example and nearly 60 percent of the money spent on roads came from such taxes. Eventually, states charged truckers weight-mile fees and vehicle-registration charges. Federal tire taxes were also included in highway funds. 

A U.S. Department of Transportation annual report called Highway Statistics reveals that in 2004 highway-user revenues totaled well over $100 billion. Nearly $21 billion of this was diverted to mass transit and other nonhighway programs but should still be counted as highway-user fees. 

At the same time, nearly $39 billion was spent on highways out of property taxes and other taxes. Of the total amount spent on highways in 2004, then, net subsidies amounted to $39 billion minus $21 billion, or about $18 billion. This is about 12 percent of total spending on road construction, maintenance, and operations such as highway patrols. (See table HF-10 of Highway Statistics 2004.) 

The myth of interstate highway subsidies is most pernicious because it supports claims that postwar suburbanization is some kind of plot rather than the preferred choice of most American families. Former Milwaukee Mayor John Norquist, for example, argues that interstate subsidies interfered with the free market and that interstate highways built through the hearts of cities drained them of jobs and residents. In reality, federal highway planners originally expected to bypass the cities and it was only lobbying by urban mayors, including Norquist’s predecessor, that convinced Congress to run the highways through cities. As Harvard transportation professor Alan Altshuler observes, those highways reduced inner-city congestion and probably helped save many downtowns. 

While I don’t approve of the $18 billion subsidy for other roads, it is trivial compared with the nearly 4.7 trillion passenger-miles carried on American highways in 2004 (Highway Statistics, table VM-1). This is less than 0.4 cents per passenger-mile. After adjusting for inflation, back issues of Highway Statistics show that the total subsidy over the past 84 years has averaged less than 0.5 cents per passenger-mile. The cost per mile is even lower if we attribute part of it to the 1.1 trillion ton-miles of freight carried on highways each year (National Transportation Statistics 2004, table 1-46a). 

On a state-by-state basis the subsidies range from 2.6 cents per passenger-mile in Alaska to minus 0.6 cents in Maryland . Eight states in addition to Maryland divert enough money from their gas taxes so that highway users pay more fees than the states actually spend on roads. At the other end of the scale, seven states and the District of Columbia join Alaska in spending more than a penny per passenger-mile in subsidies to roads. Subsidies in the remaining 32 states are between 0 and 1 cent per passenger-mile. 

A case could be made that some of these local expenses are not even subsidies to driving. Streets existed and were paid for by local taxes long before automobiles. In most modern subdivisions, developers build the streets and deed them over to the city or county, which then has to pay only for maintenance. Street maintenance, snow removal, and other operations are as important for pedestrians, cyclists, and public safety as for auto drivers. Still, cars dominate many of these streets and auto-user fees should pay for most of their maintenance. 

Rail and transit advocates use the myth of major highway subsidies to justify more subsidies to Amtrak and public transit. Yet according to the Bureau of Transportation Statistics, taxpayers pay at least 21 cents per passenger-mile to subsidize Amtrak. Subsidies to public transit in 2004 averaged 65 cents per passenger-mile, says the American Public Transportation Association’s Transit Fact Book 2005. (For the record, subsidies to air travel are about a tenth of a penny per passenger-mile.) 

Amtrak and transit subsidies have been far greater than highway subsidies for at least 35 years. In recent years total transit subsidies have been twice as great as total highway subsidies even though highways carry a hundred times more passenger traffic and thousands of times more freight than transit does. 

The Social Costs of the Automobile 

While highway subsidies may be minimal compared to the amount of work they perform, I still believed that the automobile imposed large external costs on society. If only we could get people to drive less, for example, our air would be far cleaner. 

The Environmental Protection Agency and many American cities have spent millions of dollars on numerous creative programs aimed at reducing driving. The only thing that has worked to clean the air, however, is to clean it at the tailpipe. Thanks to technological improvements, our air is far cleaner today than it was in 1970 when Congress first passed the Clean Air Act.

The average car on the road today produces about a tenth as much pollution as cars in 1970. So even though we drive almost three times as many miles as Americans did in 1970, all our cars together produce less than 40 percent as much pollution. Many new cars today produce just one-hundredth as much pollution as 1970 cars, so the air will continue to get cleaner even as driving increases. 

Though air pollution is declining, at least it really exists. Other so-called social costs of the automobile are more ethereal. Various auto critics have charged the automobile with “land-use impacts,” “the loss of transportation options” (that is, high-cost competitors), and trade deficits due to people buying foreign cars. After a massive study of such claims, University of California economist Mark Delucchi concluded in the Journal of Transportation and Statistics that most “rely on outdated, superficial, nongeneralizable, or otherwise inappropriate studies.” 

Delucchi himself estimates that the total social costs of the automobile average less than 7 cents per vehicle-mile (which, at an average occupancy of 1.6 people per car, works out to around 4.3 cents per passenger-mile). Strangely, most of Delucchi’s costs are congestion and accidents. Since these costs are paid mainly by auto users, they may not be social costs at all. Even if 7 cents per mile is correct, Delucchi is the first to point out that “the subsidies to public transit generally are much greater than the external costs of automobile use” (“Should We Try to Get the Prices Right?” Access, Spring 2000). 

The most recent claim is that free parking is somehow a subsidy or social cost. Some anti-auto advocates think office parks and shopping malls should require their employees and customers to pay for parking. This makes as much sense as requiring businesses to charge their employees to use office equipment or supermarkets to charge rent for shopping carts. 

Other auto skeptics claim that the automobile imposes increasing costs on American families. In fact, data from the Commerce Department’s Bureau of Economic Analysis show that since 1950 Americans have consistently spent about 9.5 percent of their disposable incomes on autos and driving. Though we actually spend a little smaller share of our incomes on driving today, we drive three times as many miles per capita as we did in 1950 (Census Bureau, Historical Statistics of the United States: Colonial Times to 1970). 

The Benefits of the Automobile 

While I once fantasized about the high costs of the automobile, I rarely thought about all the benefits autos have provided. Like suburban critic James Howard Kunstler, I imagined that American life before the automobile was “glorious,” with everyone taking trains or streetcars to work from their “magnificent house[s] surrounded by cool porches.” 

A little digging in history, however, reveals that only a tiny fraction of American city dwellers lived this way before the automobile. Most of them lived in tenements or slums and walked to their sweatshop jobs. With poor sanitation, pollution from nearby industry, and high crime, their lives were a lot less glorious than Kunstler imagines. In fact, as planning historian Peter Hall documents in his book Cities of Tomorrow, the original goal of most early twentieth-century planners was to get people out of the crowded cities and into lower-density suburbs. 

Planners had little to do with the exodus to the suburbs, however. Instead, the fortunes of the working class turned around when Henry Ford developed the moving assembly line in 1911, allowing him to double wages while halving the price of his cars. Suddenly ordinary workers could afford to buy the cars they made. Their increased mobility allowed them to move to single-family homes that previously were occupied only by the wealthy and middle-class workers who could afford train or streetcar fares. 

Wide-scale auto ownership dramatically increased American mobility. History’s most intensive network of intercity passenger trains and urban transit was found in the United States in 1920. In that year the average American rode about 1,200 miles per year on these passenger trains and urban transit lines. Today, the average American travels about 16,000 miles per year by automobile. 

This 12-fold increase in mobility has generated numerous benefits. It is no coincidence that, after adjusting for inflation, worker incomes increased by more than seven times during the twentieth century. This is partly because the automobile gave people access to more and better-paying jobs, but it is also because the automobile transformed those jobs. 

Ford’s horizontal moving assembly lines required far more land than the vertical factories that preceded them. One of Ford’s plants was a mile wide, one-and-a-half miles long, and employed 100,000 workers—far more than could live within easy walking distance. 

The moving assembly lines produced a synergistic effect: assembly lines increased incomes so workers could afford to own cars, and increased worker mobility allowed more industries to build far-flung factories using moving assembly lines. These industries moved from urban centers to suburban areas where land was less expensive. Such industrial sprawl effectively ruled out other forms of commuting, so Americans could not possibly have the incomes they enjoy today without cars. 

As incomes increased, automobiles simultaneously reduced consumer costs and greatly increased the variety of goods available to consumers. Without cars, we would not have supermarkets, club warehouses, home-improvement centers, or all sorts of other retail categories and shops. In 1912 a typical American grocery store carried about 300 different products. Today, the average supermarket carries 20,000, many carry 50,000, and a few carry well over 100,000 different products. This product diversity is possible only because automobiles bring to the stores a diversity of customers who may live many miles away. 

Thanks to autos, Americans enjoy far better housing than they had a century ago. While the full benefits of the automobile were delayed by the Depression and World War II, in the 15 years after 1945 U.S. homeownership rates soared from 44 to 62 percent as millions of families fled inner-city tenements for Levittowns and other suburbs. 

This so-called “sprawl” is the “land-use impact” that auto critics want to count as a social cost of autos. But is it really so bad that more families get to live in suburban homes with private yards? The 2000 census found that four out of five Americans live in “urban clusters” of 2,500 people or more, yet these urban clusters occupy just 2.6 percent of the land area of the United States . Not only are we not running out of open space, thanks to automobility most Americans enjoy their own private open spaces in the gardens and play areas in their yards. 

Automobiles greatly extended people’s social opportunities. Before the auto, rural residents, particularly women, could live for months at a time without seeing anyone except their direct family members. Even urban residents could be isolated: people who moved out of their hometowns might return to see their families only once or twice in their lifetimes. The automobile eliminated this social and familial isolation. 

The auto has also opened the door to all sorts of recreational opportunities that previously existed only for the rich, if they existed at all. Skiing, backpacking, wilderness hiking, fly-fishing, boating, surfing, and beachcombing are only a few of the many outdoor sports enabled by the automobile. A century ago only one out of 6,000 Americans visited Yellowstone Park . By 1965 it was more than one out of 100. 

Among the other benefits of auto technology are emergency medical care, rapid-response fire and police services, and the ability to evacuate in case of natural disaster. Hurricane Katrina left thousands of families stranded because New Orleans has the lowest auto ownership rate of any major American city. The news media reported lengthy traffic jams when Hurricane Rita threatened the Gulf Coast , yet every family with an automobile managed to escape the path of the storm long before it hit. 

Perhaps most important, autos are far more egalitarian than the plush Pullman cars and expensive streetcars of a century ago. More than 92 percent of American families own at least one automobile, and whether you drive a 1985 Yugo or the latest Cadillac, you have exactly the same right to drive on any highway, road, or street in the nation. 

Ending Highway Subsidies 

Government funding of roads, even through user fees, has interfered with the free market. But at least through the 1970s a private road system would not have looked much different from the one America built. Before 1980 most highways were located and built by state and local civil engineers who knew they were funded out of user fees. Their goals were to build safe and efficient roads, and their incentive was to build roads where people wanted to drive so they would pay the user fees needed to fund the roads. Subsidies of less than half a penny per passenger-mile—perhaps $60 to $70 per person per year—would have very little effect on American travel. 

Transportation engineers largely ignored social costs when locating and designing highways. In 1950, when the Interstate Highway System was still in the planning stages, transportation economist Shorey Peterson warned against trying to account for social costs. By taking only safety and traffic into account, he observed, engineers could guide highway spending “on a more precise basis” than most other government programs. Any attempt to consider “the public interest,” however, would lead to “the wildest and most irreconcilable differences of opinion,” predicted Peterson. “Controlled in this way, highway projects are peculiarly subject to ‘pork barrel’ political grabbing.” 

This is exactly what has happened in the last two or three decades as urban planners have displaced civil engineers in planning urban transportation. The planners argued that they would better account for social costs. Instead, many have supported a crusade to reduce driving by allowing congestion to increase. Where possible, they diverted highway funds to expensive and little-used rail transit projects. They spent other funds on endless studies or on projects that actually reduced roadway capacities. 

The result is that transportation decisions have gotten far more political. In 1981 Congress included just ten “earmarks,” or pork-barrel projects, in the transportation bill it passed every six years. According to Ronald Utt’s A Primer on Lobbyists, Earmarks, and Congressional Reform, since then the number of earmarks has steadily increased, reaching 6,371 in the 2005 bill. In short, thanks to planners, fewer roads have been built than private road companies might have built, and thanks to earmarks, the ones that have been built haven’t always been in the best locations.

To libertarians, the solution is obvious: privatization. That is far more easily said than done. However, we can approach the problem incrementally if we recognize that roads are really two separate issues: the highways funded by federal and state user fees and the streets funded out of local taxes.

While only a small increase in gas taxes could eliminate road subsidies, gas taxes are the wrong approach for solving transportation problems. For one thing, it is much more likely that increased state and especially federal gas taxes will end up as pork than that they will trickle down to reduce local street subsidies.

A cents-per-gallon tax also does not account for inflation or changes in fuel economy. Because of inflation and improved fuel economy, you only pay half as much gas tax for every mile you drive as your parents did in 1960. This shortfall in highway revenues is the main reason roads are more congested today than they were a few decades ago.

Finally, gas taxes send the wrong signals to travelers on congested roads. While we expect to pay more for airline tickets and hotels during busy periods, gas taxes are the same whether people drive at 5 a.m. or 5 p.m.

Fortunately, we now have electronic toll systems that were not available when Oregon passed the first gasoline tax in 1919. Electronic toll lanes in California, Minnesota , and other states vary the toll based on the amount of traffic. This insures that the lanes never get congested and people don’t waste time (and fuel) sitting in traffic.

Although some people have dubbed these “Lexus lanes,” surveys show that people of all income levels use them when they need to get to work on time or have some other pressing business. Few people use them all the time, although many women find that they would rather pay a small toll to enjoy the safety of these roads even during nonrush-hour periods.

Robert Poole of the Reason Foundation proposes that cities build complete networks of toll lanes that will never be congested, giving buses, emergency vehicles, and anyone else the opportunity to drive the same speeds at rush hour as at midnight. Construction costs can be financed mostly if not entirely out of toll revenues. Many other transportation experts believe that all new highway capacity should be funded out of tolls, leaving gasoline taxes to maintain existing roads.

As more toll roads are built, privatization of those roads will be an obvious next step. Chicago recently sold a 99-year lease to the Chicago Skyway to a Spanish toll-road consortium, and Indiana sold a 75-year lease to the Indiana Toll Road. Cintra-Macquarie, the Spanish consortium, will pay $5.6 billion and promised to maintain the roads and make certain improvements in exchange for collecting the tolls. Chicago and Indiana plan to use the revenues to improve other highways. 

Ever the pioneer, Oregon is considering installing GPS transceivers in every car and eventually charging drivers a fee that depends on how many miles they drove on each individual road or street and the time of day they used it. Many people have raised privacy concerns about this plan. On the other hand, Wisconsin has indexed its gas tax to inflation, thereby correcting part of the problem with it as a user fee. Inflation-indexed fuel taxes can still be a fair way of paying for relatively uncongested roads, while tolls should used for new highways and in congested areas. 

Local streets would follow a different path to privatization. University of Maryland policy analyst Robert Nelson observes that St. Louis and other cities have allowed neighborhoods to take control of their streets. Eventually, Nelson imagines, that control could include taking over title and road maintenance. 

I still bicycle as much as I can and dream of riding trains across the prairies and through the mountains. But I now realize that automobiles have become the dominant form of travel not because of subsidies but because they are the fastest, most economical, and most convenient form of transportation ever devised for most trips between about a mile and several hundred miles. More than any other invention, the automobile liberated Americans and people all over the world.

It’s tempting to think the military budget is different from the rest of the government’s budget. Politics surely would not intrude on such an important matter. But we know better. The Pentagon is as much a part of the bureaucracy as any other department. We may hate to accept it, but weapons systems, military aircraft, and naval ships have been built solely because they created or maintained jobs in an important congressman’s district. If de Borchgrave is right, this is more popular than ever.

Classical liberals have long warned of this practice. Milton Friedman criticized it in his book from the 1980s The Tyranny of the Status Quo. Liberals further back have sounded the same tocsin. For example, John Bright, the great peace-and-free-trade activist and member of Par­liament, in 1858 condemned the British government’s “excessive love for the ‘balance of power’ [as] neither more nor less than a gigantic system of out-door relief for the aristocracy of Great Britain.”

A similar point was made in the twentieth century by the liberal journalist John T. Flynn in his 1944 book As We Go Marching, the classic study of the rise of fascism in Italy and Nazism in Germany. Long before Mussolini, Flynn wrote, Italian governments had increased expendi­tures, taxation, and debt through programs intended to please constituencies and keep the economy going. Even before Keynes published his General Theory in 1936, politicians feared that without big government spending, depression and destabilizing unemployment would be the rule. So they spent, taxed, and borrowed.

“But this policy does run into resistance—and resist­ance in very influential quarters,” Flynn wrote. “The large taxpayer is against it. He acquiesces reluctantly. And as the debt grows and he looks with growing fear on its future proportions he begins to exert his full influ­ence against it. In different countries the basis of resist­ance takes different forms, but it comes chiefly from the conservative groups. Hence it becomes increasingly dif­ficult to go on spending in the presence of persisting deficits and rising debt. Some form of spending must be found that will command the support of the conserva­tive groups. Political leaders, embarrassed by their subsi­dies to the poor, soon learned that one of the easiest ways to spend money is on military establishments and armaments, because it commands the support of the groups most opposed to spending….

“Thus it was because the government could get pub­lic agreement for loans for this purpose and because such loans were essential to the policy of spending which kept the floundering economic system going that the militaristic policy remained so vital and vigorous an institution in Italy—and in every other continental country….

“I must not leave this whole subject of spending and the means employed to spend, including militarism, with­out observing that there is nothing new in it. It is as old as civilized government. And what is more, the protago­nists of it have understood precisely what they are doing.”

We have learned from the Public Choice school of political economy that benefits from government spend­ing are concentrated on relatively small self-conscious interest groups, while the costs are spread thinly among the mass of taxpayers. Hence the beneficiaries have far more incentive to work the halls of government than do the preoccupied taxpayers. No wonder interest groups have the advantage. When the label “national security” is affixed to a spending bill, so much the better for the rel­evant group, and so much the worse for the taxpayers, who are in no position to verify the claim.

What’s the moral here? That anything called defense is bogus? Of course not. The moral is that given the coercive and expansive nature of the political process, the appropriate attitude of the taxpayer is skepticism, or as Jeffersonput it, “jealousy,” rather than confidence.

* * *

Any advocate of separating school and state is imme­diately hit with the challenge: “But what about the poor?” Up until now we could draw on theory and his­tory for an answer. But now we have contemporary examples from the poorest countries of the developing world. James Tooley reports on his path-breaking research.

Ludwig von Mises was arguably the greatest econo­mist and advocate of free markets in the twentieth cen­tury. In this first of two articles, Richard Ebeling details Mises’s contributions to sound economic thinking and the cause of liberty.

Elections in Germany and Japan could herald an end to their experiments with the Third Way. Norman Barry looks behind the headlines.

During his long career F. A. Hayek wrote volumes not just on economics, but on broader social philosophy as well. After a rare chance to examine Hayek’s private notes, Steven Horwitz discusses the great thinker’s worldview.

The standard bill of indictment against the free mar­ket has a curious feature: all the alleged offenses have their roots in government intervention. Joseph Stromberg has the particulars.

FEE is celebrating its 60th anniversary this year. Whom better to turn to for an early history than Henry Hazlitt. He provides this month’s Timely Classic.

The Freeman‘s columnists have hit on another set of fascinating topics. Richard Ebeling revisits Keynes’s Gen­eral Theory. Lawrence Reed recounts his favorite free­dom-oriented movies. Thomas Szasz explores psychiatry’s concepts of mental illness and brain disor­der, and their relationship to freedom. Robert Higgs examines U.S. economic policy before Japan’s attack on Pearl Harbor. Charles Baird looks at a dispute between organized labor and the National Organization for Women. And David Henderson, reading a case for med­ical rationing, responds, “It Just Ain’t So!”

Books coming under review this issue scrutinize Russian conservatism, the miracle of electronic transac­tions, the “new new left,” and economic sense.

—Sheldon Richman(srichman@fee.org)

Pork-barrel science is the subject of James D. Savage’s excellent study of an arcane but important aspect of American academic science. He argues that the trend toward pork both corrupts the merit system for research funding and undermines the rational framework we have employed for the delivery of federal funds to those who do science.

Federal science funding used to be driven by the model of peer review. Congress would appropriate money for general fields of research, but decisions on the precise allocation of those dollars would depend on the evaluations of scientists called on by various agencies. That tax-funded system isn’t perfect, but Savage says it tends to steer funds toward the research proposals that seem to have the greatest likelihood of success. Over the last two decades, however, politicians have been avoiding the peer review process more and more. Instead, much of the federal support for scientific research is now done through “earmarking,” which is to say that money goes to institutions for purposes that may have only a tenuous relationship to science. Earmarking, as Savage puts it, is a “collective action problem” that challenges the “dominant policy regime” of peer/merit review.

Savage brings a wealth of insight from his years near the sausage grinder of science policymaking, having served as a consultant to the Congressional Research Service and to the Office of Technology Assessment. One of the key reasons for the move away from peer/merit review, he observes, was that its results were decidedly unegalitarian. The “old regime” of science funding sent the vast majority of the money to a small set of universities where most of the top scientists worked. In other words, it became obvious to many that a few states and universities were getting most of the resources under peer/merit review, so direct political action to “balance” the ledger was undertaken. Few university officials tried to hold out for meritocracy. Most, as public choice theory would predict, eagerly jumped on the earmarking bandwagon, trying to get as much as possible for their institutions, even though it meant diverting resources from more serious scientific uses.

Savage’s book is a detailed exposition of the incentives for earmarking in our politicized distribution system, the activities of lobbyists in the employ of universities, and the battles within Congress and between Congress and the White House over academic pork. He knows his stuff and he provides useful documentation of his colorful examples, like Senator Ted Stevens’s infamous $40 million earmark for the University of Alaska to find out how to get energy from the aurora borealis! And no legislator could rival fabled pork ranger Robert Byrd of West Virginia, whose huge trough of goodies for his state included $40 million for Wheeling Jesuit College (annual budget: $14 million) for a “classroom of the future.”

Science policy insiders will appreciate this book more than the novice reader, but there is also much that informs at a general level. My criticisms are not of the book’s content, but what it misses. One wishes that the author had ventured to comment on what a “best” arrangement for federal scientific funding might be like so as to eliminate the problems of earmarking, but he does not. Nor does Savage tackle the deeper question of whether government subsidies for scientific research are necessary at all, as Terence Kealy did in his book The Economics of Scientific Research.

Furthermore, Savage does not address how federal funding of science in general, and pork-barrel funding in particular, crowds out or supplants funding from private firms, and he fails to remark on the effects of the politicization of public health, with its “disease of the decade” phenomenon. The heavy subsidization of AIDS research, for example, redirects the efforts of medical researchers away from less “popular” but more deadly pathologies.

Those are sins of omission, however, in what must be described as a welcome critique of the hazards of the growing entanglement of academic science and politics, and the growing dependency of America’s nominally independent centers of wisdom on the largess of the federal government. Perhaps we could say that they suffer from “trichinosis of the spirit.”

Jack Sommer is Knight Distinguished Professor of Public Policy, University of North Carolina at Charlotte.