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EH.NET BOOK REVIEW
Published by EH.NET (January 1998)
John F. Walker and Harold G. Vatter, _The Rise of Big Government in the
United States_. Armonk, NY: M.E. Sharpe, 1997. 256 pp. $64.95 (cloth),
ISBN: 0765600668 . $24.95 (paper), ISBN 0765600676.
Reviewed for EH.NET by Werner Troesken, Department of History, University
of Pittsburgh, <[log in to unmask]>
In _The Rise of Big Government in the United States_, John F. Walker
and Harold G. Vatter argue that government growth is response to the
evolution of the market, shifts in ideology, and changes in international
relations. Although Walker and Vatter document the growth of local and
state governments, they focus mainly on the growth of the federal
government. Their story begins in 1890 and extends through the present.
Walker and Vatter take issue with two common explanations for the rise big
government. First, they claim that economic and political crises have not
caused the size of government to ratchet upward, as Robert Higgs argued in
_Crisis and Leviathan: Critical Episodes in the Growth of American
Government_ (New York, 1987). Second, they claim that government
bureaucrats seeking to maximize their own power and wealth have not
prompted the rise of big government, as William Niskanen argued in
_Bureaucracy and Representative Government_ (Chicago, 1971).
For Walker and Vatter, government growth is primarily a response to
the vagaries and failures of the market. In a nutshell, when the market
generates outcomes that society does not like, society demands that the
government intervene and make things better. The government's ability to
solve the problems wrought by the market depends critically on the larger
culture's ideological make-up. In eras dominated by a laissez-faire
ideology, the government grows less, and is less successful in dealing with
the problems generated by the market.
Although Walker and Vatter are both economic historians, they chose
not to consider much recent work in economic history. Consider two
examples. The authors argue that federal deposit insurance has stabilized
the banking industry and protected small depositors. In making this
argument, Walker and Vatter do not refer to numerous articles by Charles
Calomiris, David Wheelock, and Eugene White. The works of Calomiris,
Wheelock, White, and others, highlight the moral hazard and adverse
selection problems that have plagued deposit insurance schemes throughout
history. Walker and Vatter also argue that since World War II, fiscal
policy has stabilized the macroeconomy and prevented severe downturns.
Their discussion would have been better had they addressed Christina
Romer's work on pre- and post-war business cycles.
Overall, Walker and Vatter tell a plausible story, though I would have
preferred a more balanced analysis, one that identified the costs, as well
as the benefits, of big government. Readers wanting an introduction to the
rise of big government, or those wanting an account that emphasizes the
benefits of big government, will probably find this a useful book. Those
wanting a more thorough or balanced account should look elsewhere.
Werner Troesken
Department of History
University of Pittsburgh
Werner Troesken is author of _Why Regulate Utilities? The New Institutional
Economics and the Chicago Gas Industry, 1849-1924_ (University of Michigan
Press, 1996).
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