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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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