The Chimera of the "Commanding Heights"

Back in the old days, statists and thug dictators wanted to control the "commanding heights" of the economy. That was Lenin's line. With the "New Economic Policy" that allowed a resumption of some capitalist enterprise after the disaster of War Communism, he needed to assure his Bolshevik comrades that he still believed in The Plan.

He told them not to worry: The reforms were relatively modest, and the new Soviet state would always retain its control over what he called the "commanding heights" of the economy.

In those days, according to Arnold Kling and Nick Schulz in "The New Commanding Heights," the commanding heights were heavy industry, energy, and transportation. Socialists fascists, and other statists all over the world were determined to control them, and they did. They did something more. They just about destroyed them. They did destroy the Soviet Union, of course.

But now the socialists and the statists are determined to control the new commanding heights of the economy: education and health care. Conservatives and libertarians aren't paying enough attention to this, and are losing the battle for control to the socialists. Even George W. Bush increased the government control of education with No Child Left Behind and Medicare Part D, write Kling and Schulz. Only now, with ObamaCare and the state budget battles, are conservative politicians and activists finally engaging on health care and education.

Let us step back a moment, and think about the big picture. First of all, our liberal friends believe in government and in political power. So their approach to politics is to seize the commanding heights of the economy for government power. That is what they do; that is what they are. But how can conservatives push back against this? The answer is: they can't, not until the commanding heights in question are broken.

Let's think back. The stunning achievements of the railroads and the steel industry were stigmatized as the work of bandits, like the robber barons of the old Alpine mountain passes that robbed travelers between France and Italy with impunity. It wasn't until government had run the old commanding heights into the ground, with the steel industry bankrupt and transportation losing money for decades that the voters came around and elected politicians to deregulate industry and transportation. Government is still up to its ears in energy, and making a complete mess of it.

The same is true about education and health care. When government offers subsidized education and health care, who is going to say: forget it? On the contrary, you would be a fool to say No. It's free isn't it?

But, of course, government is busy breaking education and health care just as it once broke heavy industry and transportation. Education is a complete mess, with about half the students going to college requiring remedial instruction. And don't even start talking about the educational mess in the inner cities. Health care? The Rand Corporation back in 1971 found that the funding of health care didn't seem to have much of an effect on health outcomes. The more money people had for health care, the more they spent.

Kling and Schulz hold out hope that conservatives are beginning to make a difference in education and health care, but I think that is missing the point. There is only one way that we will force education and health care out of the grip of government. We will get to do it when they are broken.

In a better world, voters would understand that government is force, politics is power, and government wrecks everything it puts its hands on. They would say: forget adding this program or that program; all that will happen is that government will wreck it. But in the real world, people like free services.

In the real world reformers must wait. Reform can only happen when government is broken. If it ain't broke, the voters won't let you fix it.