The Federalist Number 24 and the Scope of Government

In the Federalist Number 24 Hamilton makes the following statement about the powers that the Constitution confers upon the federal government:

"The powers are not too extensive for the OBJECTS of federal administration, or, in other words, for the management of our NATIONAL INTERESTS; nor can any satisfactory argument be framed to show that they are chargeable with such an excess."

Are the powers that we have granted the federal administration today impractical for the management of national interests? I refer to the myriad of large-scale administrative tasks that the President and Congress are asked to review: Social Security, the Federal Reserve monetary system, Housing and Urban Development and the Department of Education. These are broad, comprehensive programs of such scope and extent that no group of people, much less a single person, could competently oversee all of them.

Compare the problems of the federal government to the problems of General Motors. The president of General Motors is beset with complex details and administrative challenges concerning a handful of products: automobiles, parts, financing and some additional products. Yet, the management of this handful of products has proven too difficult for the management of General Motors to handle all that well, and the firm seems to be drifting to bankruptcy.

Are the politicians who serve in Congress or the President that much more capable than the executives of General Motors? Are the people whom the president appoints to his cabinet and to senior posts in the federal agencies that much more competent than the management of General Motors? In the case of Hurricane Katrina, it seemed that the government agencies are not competent at all. Yet, the public has burdened the federal government with such extensive powers that the management problems, ranging from control to budgeting to personnel selection are orders of magnitude more complex than the problems that confront the executives of an automobile company.

When Hamilton, Madison and Jay wrote the newspaper articles that form the Federalist Papers, the United States of America had a population of three million. Today, the average state has a population of six million. Yet, the powers of government have been federalized to a much greater extent than Hamilton anticipated. This enormous concentration of managerial demands resulted from the perceived threat that industrial concentration posed to the economy. Yet, the concentration resulted in enhancing such concentration. The New Deal intensified the extent of concentration by establishing federal programs that replaced state discretion in fields like social security. The concentration was also enhanced by the civil rights struggles of the 1950s and 1960s, which required a degree of federal intervention to end Jim Crow laws and discrimination.

Today's problems are managerial as much as strategic or political: how to make social security work; how to best combine incentives for innovation with an equitable tax system; whether to extend or contract the scope of government; how to manage the nation's money supply to limit economic crisis and corruption. All of these are managerial problems that lend themselves to a range of strategic choices. The political arguments about them become more emotional and cantankerous as the various protagonists, Democratic and Republican, know less about each question. The expertise that fields like economics, sociology and business offer do not offer one or another optimal solution to any of these problems. In industry, trial and error has proven to work better than grand theory. Yet, subjects of considerable subtlety from the Iraqi War to the management of Social Security are pronounced upon with dogmatic rigidity in the pages of the daily newspapers and in the blogs.

Why can't a pragmatic delegation of complex managerial decision making to states, which are on average twice as large in population as the entire nation was in Hamilton's day, permit a multiplicity of solutions? Such a multiplicity would serve (a) to afford experimentation and learning about solutions; (b) to test alternative ideological approaches; (c) to resolve bitter conflict among Red and Blue proponents (d) to reduce and contain the risk of failure; and (e) to enhance democracy.