The people's government

Contents

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I. The Idea i

II. The Economic and Moral Significance

Chapter I The Idea

While it was my original intention to place before the reader within the limits of a small volume a clear and convincing explanation of a very elementary idea, I found after repeated attempts that such a task was. beyond me, so that I was gradually led to see that I should be obliged to make a sacrifice in one of two directions. OThat is, I found that it would be necessary for me either to abandon the notion of making the volume brief or the idea as clear as I had wished. I finally decided in favor of brevity; and if I am mistaken as to clearness, I shall, of course, be much gratified.

As for the idea Itself, this may be expressed in a phrase of five words, although it presumes no less than to indicate how a democratic government could be founded on a basis of truth and justice

I not only with the people as we find them to-day, but also in the main with our system as it is organized to-day. In regard to the fundamentals no change would be required except that of supplying what might be termed a missing link, a factor intended to serve the purpose of compelling the crooked to steer a straight course. As I see it, our ship of state is in need of a rudder. This is not intended to imply that I am the first to recognize the need of such a thing as a steering gear; but it does intend to imply that the apparatus as originally devised for that purpose has failed to do what was expected of it. The matter to which I refer is that of maintaining a proper system of checks and balances through the division into three departments of government. Of course I am aware that one who expresses an opinion of this nature is liable to be termed a heretic. However, as I am going to plead in my d'efense that I am not an advocate of boss-rule, which I regard as a direct result of a flaw in our system, my heresy is at least based on a worthy motive.

In respect to the flaw% this does not lie in the three-fold division, which I should not think of disturbing if I could, but in an error in the form of the separation. As things have heretofore been, the chief executives have been regarded as

THE IDEA

the legitimate heads of the executive departments, while their functions have been for the most part performed on the legislative side. That is, the term chief executive has been to my mind misleading, because the official who occupies that position, whether the President, a governor, or a mayor, has considerably more power in legislative than he has in executive matters. Thus, although on the executive side he has in large measure the power to appoint the individual department heads, the latter officials are nevertheless so placed that they are not under any immediate obligation to give his views precedence over their own. Morally, he may be in control, but officially he has no power to interfere with them unless he finds they are doing wrong. In legislative affairs, on the other hand, his powers are not confined to moral suasion, for here they are not only actual, but enormous ; the veto power of the President, for example, being equivalent to no less than one-fourth of the total number of Congressional votes on the negative side. As a result he is practically in control of the legislative and at the same time morally In control of the executive department, and therefore plays a role which appears to me to be contrary to the spirit of popular government.

For example, if for the sake of argument we assume the total membership of Congress to be 451, there would be required under a majority rule 226 affirmative votes to carry a measure, while under the two-thirds rule resulting from the veto it would require 301 to carry it; thus changing the figures from 226 as against 225 to 301 as against 150. This means that a negative vote of 151 against an affirmative vote of 300 would be a negative victory; for the President would have the power to add to the 151 his own quota of 150, making the count 301 against 300. Or, looking at the matter In a different way, he has a vote for every negative one, which Is equivalent to the power of doubling the total number of negative votes. As for the one-fourth above mentioned, this Is based on the Idea of a total of 601, the President's 150 being Included.

As the President Is not entitled to cast a single affirmative vote, he naturally has no direct power to force Congress to pass measures that he desires to put through. But Indirectly he has the power to shape measures to his liking by means of the club of 150 negative votes which he may hold over the heads of the members of Congress who refuse to fall in line. Whether or not the President should have such power Is a question upon

THE IDEA

which opinions may legitimately differ. It only appears ridiculous to me that under these circumstances we should be still harboring the notion that the legislative and executive departments were independent of each other.

As a remedy I suggest that the so-called chief executives shall be looked upon rather as the chief legislators, while the heads of the individual departments shall be regarded as the chief executives. This division would be logical because it would stand for a complete separation of the two economic factors, namely, the appropriation of money, on the one hand, and its expenditure, on the other. In such manner the executive would exercise a genuine check upon the legislative department, because it matters not how lavishly the funds were appropriated by the legislative bodies, the department heads could see that they were expended without waste. The people as a rule are not so much concerned in the sums appropriated as they are in the idea that a dollar spent shall bring a dollar's worth in return. For example, they do not as a rule object to the appropriation of sufficient money for street cleaning purposes to enable the streets to be cleaned. But they do object to the expenditure of enough money to keep them clean and finding them dirty.

Now if the chief executive should be transferred to the legislative side, where in view of the veto power it would seem that he properly belonged, it is evident that a void would be created on the executive side for the reason that there would then be lacking an entity to whom the individual department heads would be immediately subordinate. Therefore a factor would have to step in to take his place, and this would be the missing link. But the latter as I have it in mind would not merely replace the person of the chief executive as he has been heretofore known to us, because this would be simply substituting one boss for another. The fact is that this new entity would have to be capable of doing efficiently what an ordinary person can only do perfunctorily however wise he may be, because It Is not logically conceivable that any single individual should know more of the details pertaining to each Issue arising in departmental management than all the department heads combined, and especially if he had never had a single day's experience along the lines followed by any department, as so frequently happens under our system of government. And if we act upon the principle that he does, we simply place ourselves in the ridiculous position of employing fools to teach the wise. Consequently, if

THE IDEA

we desire to be logical, we must put in the place of the chief executive an entity that Is capable of performing the service that Is required of him with dignity and grace. Personally, I know of but a single element that Is qualified to occupy such a position. This Is justice. Thus, my viewpoint Is that all Issues arising In departmental management shall be decided on their merits, an ideal which cannot be reached unless the facts are weighed In the balance and the decisions rendered accordingly. And, as this Is the function of justice, my theory of government resolves itself Into the Idea expressed in the five words that if we want an honest and efliclent administration we must conduct departments on judiciary principles.

From what I have stated It naturally follows that, in my opinion at least, the checks and balances as originally Intended would come much nearer to our ideal If the heads of the Individual departments should act as checks upon the legislative department, and the judiciary rather than the legislative bodies should act as the check upon the Individual department heads. This would serve to take the Individual departments out of the hands of the politicians; for while the latter would still have the power to appropriate the funds at their disposal to suit their pleasure, they would no longer have the same kind of power to control their expenditure. They would still have the power to declare what shall be done, but the way of doing things would be decided by the department heads under the control of the judiciary. But the judiciary as I have it in mind from this point of view would differ from the ordinary judiciary both in its makeup and its duties. As for its makeup this would be such as to render It impossible for it to fall a prey to the politicians, while Its philosophy would stand for a new branch of jurisprudence, namely, the jurisprudence of efficiency, which, under its direction, would be In due course developed. In such cases as theft, graft, bribery, and so on, the duties of the present judiciary need not be extended, because they sufficiently cover the ground. But there is one element that they do not cover, namely, that of waste ; and the Idea that I have In mind is the establishment of a judiciary with a view to the prevention of unnecessary waste.

Chapter II The Economic And Moral Significance Of Unnecessary Waste

As I see it, all unnecessary waste In the public service would be eliminated if each issue arising in departmental management should be decided on its merits. And the thought that I here regard as new is that all such issues should be so decided. At this point I shall expect the reader to be surprised not at the expression of the idea, which he will probably look upon as axiomatic, but at the notion that any one in the present era should have the hardihood to present it as new. But yet, my dear reader, I doubt whether any one since the beginning of time has before this made the suggestion with the notion that it should be applied in practice. The truth is that while it may be looked upon at first as an axiom it is not so in fact, because in the nature of things opposites cannot be axioms, and the governments have always been conducted on the basis of a principle that appears to be equally logical, while it is at least in part an opposite.

Thus the principle that has always been recognized has been that of placing an individual at the head of a department, giving him the power to decide each issue as he thinks best, and then holding him responsible for the results. As it stands this proposition appears to be fully as logical as that each issue should be decided on its merits. But aside from the fact that it is intrinsically absurd, for reasons that I shall explain, it is antithetical to the view that all issues shall be decided on their merits, because it would be unjust to demand that a department head should decide an issue on its merits and be held responsible for the results if he could obtain better ones by deciding it contrary to its merits. That is, while in some instances truth and justice are clearly more profitable than untruth and injustice, this is not so of all; and one who is held responsible for the results alone must be permitted to be untruthful and unjust in those instances in which these will lead to the more profitable results. If the reader should object to the idea that a department chief should be permitted to be truthful or untruthful at his discretion, then he will have to favor the abolition of his privilege to be untruthful; and, if so, he will be

lO automatically driven to favor the proposition that each issue shall be decided on its merits, for there is no other alternative.

Therefore, if we should come to an agreement to the effect that hereafter each Issue must be decided on its merits, then consistency to our scheme of justice would demand that the department head be relieved of the responsibility for the results. Apparently this would demand a sacrifice on our part which we should not make without careful deliberation. But actually this is not the case by reason of the absurdity involved in the original proposition. And the absurdity lies in this, namely, that one who manages the affairs of another is not, never has been, and in the nature of things can never be made, responsible for the results, when the results are considered from the standpoint of waste. While the proprietor may give a manager the power to waste by authorizing him to decide the various issues as they arise, he himself will retain the responsibility for the waste, because it Is he, and not the manager, who will be obliged to pay the bills. The best he can do Is to lock the stable door after the horse has been stolen by discharging the manager who has been wasting his funds. Therefore the wiser course to pursue, if one is desirous of preventing waste,

II

IS that of refraining from conferring upon the manager the power to waste by demanding that each issue be decided on its merits.

At this place, however, we must be cautious in order to avoid falling into a trap. Thus, as the proposition reads, it would appear to stand for the idea that from a purely business point of view the wisest course to pursue would always be that of appointing as manager the one who was the most capable and desirous of reducing waste. But this does not necessarily follow ; and it Is in fact true only when the conditions are such that the elimination of waste is the controlling element in the attainment of success. For if it should be true as a general proposition, it would naturally have to follow that the most successful financial results were obtained by those persons whose affairs were conducted with the least waste, and vice versa. But this theory is upset by the fact that when we look about us we do not find any such thing. Indeed, what we do find in business is the absence of any direct relation between financial success and waste; a concern that wastes practically nothing often having great difficulty in making both ends meet, while one that wastes inordinately may become enormously wealthy. This is so for the reason that in business many factors are called into play of which the problem of waste Is but one. Therefore, when other factors are favorable, the effect of the waste on the general result, even if it should amount to very substantial sums, may be practically negligible.

From what has been mentioned It naturally follows that In the conduct of a business the losses sustained through waste may be offset by profits obtained through enterprise or shrewdness, so that a manager who is very enterprising or shrewd may achieve better financial results even if recklessly wasteful than a manager who reduces the waste to a minimum, but is lacking in the elements that make for a success. As for the trap, this lies in the fact that while it might be supposed that the same thing would apply to government, such a notion would be delusive, because government Is not business. That we have come to look upon the management of a public department In the light of a business Is evident from the fact that we have become accustomed to declare that It should be conducted strictly on business principles. The truth is, however, that a public department is not a business in the ordinary sense of the word, because the term implies the idea of something to sell at a profit In order to obtain funds with which to buy, while the public departments, with a few exceptions, buy only, and call upon the people to pay the bills. And this is the reason why it requires no general or special education or intelligence or training to be qualified to occupy the head position in any department of the public service in the land. We have here not a condition under which the losses sustained through wasteful management may become more than counterbalanced by enterprise or shrewdness on the side of profits, as there is but one side to the ledger. Consequently the controlling factor in the difference between efficiency and inefficiency in the management of a public department centers in the conception of waste.

Nor do the conditions differ in those exceptional instances in which the departments have something to sell, whether postage stamps, water, or gas, because the circumstances are siii generis in that the receipts are not dependent upon the business talents of the manager, but are automatically regulated by the expenditures just as water seeks its own level. It is only that under good management the prices or the taxes or both go down, while under mismanagement they do the reverse. Or the difference may manifest itself in a difference in the quality of the commodity or of the service at the same expenditure.

If the foregoing analysis should be warranted 14 by the facts, then it would naturally follow that while from a strictly business point of view it may be wise in the conduct of a business to give the head of a department the power to use his discretion in deciding the various issues as they arise in buying and selling as well as in the supervision of the employees, it would not be wise to follow that policy in the conduct of a public department, because the conditions here are so entirely different. The essential difference, as has been indicated, is that while in business the income is obtained as a result of earnings produced by the manager, so that the value of his services may be gauged by the balance sheet, in a public department it is obtained by the manager without having been earned by himself, so that the value of his services cannot be gauged by the balance sheet. In fact, a public department simply receives its income in the form of a trust fund, and under a pledge that it will be expended without any unnecessary waste.

The logic of what I am here driving at is this, briefly, that while It may be wise to give considerable leeway in the method of expending funds to one who Is obliged to earn more than he spends, it Is no less wise to restrict the mode of expenditure In the case of one who has the authority to spend money that does not belong to him and that he has taken no part in earning, and especially when he is under no obligation whatever to make good what he wastes. To pursue the same policy under these conditions as in business is to invite looting.

That looting does not necessarily follow is evident from the fact that there are many countries in which the public affairs are honestly administered, although heretofore this method has been universally pursued because no other has been known. But where honesty is maintained in spite of it, it is only because factors are brought into play that serve to prevent dishonesty. However, as these include appointments on a basis of merit and a code of honor among politicians, it is clear that they do not obtain with us. Nor can they ever obtain in a democracy unless its spirit is cast to the winds, as it Is contrary to its spirit to demand that merit be considered a condition of eligibility for positions at the top. Indeed, unless all citizens In good moral standing, irrespective of education or intelligence, are looked upon as eligible for such positions, we cannot speak of a democracy. But this Is a condition that must be recognized In a practical way if efficient service may be expected In spite of It. Its recognition from a practical point of view will lie In acting upon the

i6 assumption that the bosses are Ignorant, and consequently in guarding against waste by resorting to a system of management under which they will not be endowed with the authority to waste. The philosophy of this is that the chief must be placed under the obligation to do right because it is right, while the results must be permitted to take care of themselves.

I have mentioned that from a strictly business point of view it may be wise in the conduct of a business to give the head of a department the power to buy and sell and to supervise his subordinates as he chooses, and then gauge the value of his services by the results. But when I declare that a public official must do right because it is right regardless of the results, I am opening the way to the discussion of quite another side of the story, namely, the ethical phase of unnecessary waste. Yet when our proposition as to discretionary power Is carried to its logical conclusion, we find that while it may be sound from the standpoint of profits, it will not bear scrutiny in the light of ethics, as It is merely an endorsement of the doctrine that the end justifies the means. That is, if we adopt the plan of giving the business manager discretionary power and judging the value of his services on the basis of the balance sheet alone, we cannot be consistent in pursuing that policy unless we refrain from asking him questions as to his methods of dealing with those from whom he buys or to whom he sells, or as to his actions towards his competitors, or as to the demands he makes upon his subordinates. So long as the profits are satisfactory, such items as truth and justice become practically negligible factors, as they are not weighed in the balance.

Whether in conducting a business honesty or dishonesty is the best policy is a question that cannot be answered dogmatically in favor of either side, because these are general terms which require an explanation. That they cannot be used In an absolute sense is evident from the fact that no one can be absolutely honest, because to be so would necessitate human perfection; nor can any one be absolutely dishonest, because the policeman would come in to stop the game. Then, again, we are confronted by the difficulty of drawing a line between honesty and dishonesty as a policy. In the case of an individual act this difficulty does not arise to the same extent, because there are so many instances in which an act is either obviously honest or dishonest. But a policy applies to general conduct; and as the best individual occasionally does something unworthy, while the worst oc-

i8 caslonally does something worthy, the question of honesty or dishonesty as a policy is clearly one of proportions and must be studied as such.

Thus human conduct is characterized by a mixture of honesty and dishonesty in varying proportions; and it seems to me that, all other things being equal, the best policy from the standpoint of profits In conducting a business is that which represents the greatest amount of dishonesty within the law that the traffic will bear. As to the exact amount that it will bear, an analysis, if it could be made, would probably show very great variations In different lines and under different conditions. But of one thing we may be assured without going to the trouble of making an analysis, namely, that the maximum will be reached in one particular field, which Is that of the corporations, and, moreover, that In the case of the more powerful of these the traffic will bear all the dishonesty that the law will allow. And that this Is not a mere hypothesis is proved not only by the fact that the enormous wealth accumulated by some of our corporations has been the direct result of their unethical methods, but also by the fact that It has been found necessary to restrict the field of legal dishonesty In the form of anti-trust legislation. As the corporation has no soul, we naturally cannot depend upon its conscience to respect the rights or desires of others, so that the law must step in to serve as a check. And if we are desirous of studying what the doctrine of the balance sheet without regard for ethics means when carried to its logical conclusion, it is to the corporations that we m.ust go in order to obtain our data.

That the theory of the policy of honesty as above expressed will not be universally accepted as sound is evident from the fact that successful individuals are in the habit of claiming that they had acquired their wealth honestly, while unsuccessful ones are equally in the habit of claiming that wealth cannot be acquired without resorting to methods to which their moral principles will not permit them to stoop. Therefore, from a strictly scientific viewpoint the proposition must be classed as debatable. But if we look upon it from the standpoint of religion, the members of society who are sufficiently orthodox to believe In the Bible literally will be forced by coi^sistency to accept it as true, because it tells us not only that when the Millennium arrives the last will be first and the first last, but also that " It Is easier for a camel to go through the eye of a needle than for a rich man to enter Into the kingdom of God."

As I am not sufficiently orthodox to believe that the world was created in six days, or sufficiently atheistic to deny the existence of God, I am entitled to take a compromise view, which is that if one is unusually talented or lucky he may succeed in acquiring wealth or rank honestly, but that under equal conditions the chances are, as a rule, considerably in favor of the liar. And this standpoint is justified by the fact that the liar has two methods at his disposal where the truthful individual has but one. In brief, while the truthful man who has a definite goal in view will go no farther toward reaching it than the truth will take him — that is, he will turn back if it will not take him the whole way in preference to gaining his point by dishonest means — the untruthful one who is worldly wise in the spirit of Machiavelli will travel as far with truth as this will carry him; and, if this will not take him the whole way, he will resort to trickery to complete the task when it is not contrary to policy to do so. But when we give to a manager the power to reach his goal as best he can, it is this that is in store for us.

The truth of what I have just stated was first called to rny attention in a forcible manner by an incident that was related to me some years ago by the proprietor of a well-known journal. The facts in the case were these, namely, that a change

In business managers was followed by a great shrinkage In the profits of the advertising department, although the management of the latter did not change hands. Then on looking into the matter it was found that the shrinkage had been due simply to the fact that the advertising manager had succeeded in working up a large business on a false statement as to circulation to which the previous business manager had subscribed, but to which the new one had refused to subscribe. On learning the fact the proprietor had the good grace to stand by the truth, with the understanding that the advertising manager should thereafter make a plea for business on the basis of the cleanliness of the publication, of which there was no doubt. However, although cleanliness is next to godliness, the plea failed to work, and the advertising department lost nearly all its clientele.

From the preceding It would appear that business acumen and ethics were antagonistic, although the question may perhaps be regarded as a debatable one. But the point of interest to us is that even if It should be true of the management of a business, it would nevertheless be untrue of the management of a public department, which is not a business in the ordinary sense, because it does not work for profits. And the truth in regard to the latter Is that so far from business acumen and ethics being antagonistic, they actually meet here on a common platform with a degree of exactitude that is not exceeded by the law of gravitation. Consequently, we have here before us a condition under which self-interest and ethics become united by an inseparable bond, and therefore one under which we may safely proceed on the basis of doing right because it is right without any fear that such a policy will result in financial sacrifices. In the public departments, then, we have a field in which those acts which are the most ethical are also the best from an economic point of view. That this may not be apparent at the first glance is evident from the fact that it is not the most honorable, but the most unscrupulous, among the officials who fare the best from a material standpoint, because the honorable do not receive a share of the plunder. This, however, is all a mere delusion based on the notion that the government belongs to the pohticians, while in truth it belongs to the people. If we look at the question from the standpoint of the officials, then business shrewdness and ethics are again found to be antagonistic, because those who enter politics for business purposes cannot gain their ends by the adoption of ethical means. If, however, we view It from the standpoint of the people, then It will be found to be true that business shrewdness and ethics are united, because the majority of them can have no object In giving the preference to dishonest rather than to honest officials, although this Is not true of all. But In a democracy the majority Is supposed to rule.