- - Wednesday, August 6, 2014

By John Micklethwait and Adrian Wooldridge
Penguin Press, $27.95, 320 pages

“The Fourth Revolution” is about government and ideas. John Micklethwait and Adrian Wooldridge, senior editors at The Economist, posit that ”the western state has been through three-and-a-half great revolutions in modern times.” They further note, “The main political challenge of the next decade will be fixing government.”

The first revolution was the 17th-century emergence of European nation-states. Supported by “The Leviathan” of Thomas Hobbes, the authors suggest this revolution anchored European domination. The second revolution arrived in the “late eighteenth and nineteenth centuries.” Prompted by philosophers such as John Stuart Mill, western states became more meritocratic and increasingly respectful of individual freedom. The third revolution came in the 20th century, in the form of Beatrice Webb’s advent of welfare statism. In the 1980s, via economists such as Milton Friedman, a half-revolution restrained the third revolution’s advance, though not reversing it.

Correspondingly, the authors argue, the entrenchment of bloated welfare states, unproductive government and scarce resources now necessitates a fourth revolution. Western government, they suggest, just isn’t working. Offering an early anecdote (one of many), Mr. Micklethwait and Mr. Wooldridge note that Obamacare’s website debacle was no exclusive incident. Instead, “94 percent of federal IT projects over the past ten years have failed.” However, this book is no partisan hit piece: two pages later, Republicans are educated to the fact that America’s health care system costs more and delivers worse outcomes than those of less-wealthy nations.

When it comes to government, however, the authors aren’t so much concerned with what doesn’t work as with what does. Anchoring their reporting with Hobbes, Mill and Webb, they begin a journey across the world. Theirs is a book absorbed by meritocracy and disdainful of orthodox inertia. “How could you judge each individual on his merits when dunces went to Eton and geniuses were sent up chimneys?”

Nevertheless, socialism is no answer to humanity’s needs. Noting the ideology’s flirtation with eugenics, the authors remind us that “between 1934 and 1976, some 6,000 Danes, 40,000 Norwegians, and 60,000 Swedes, 90 percent of them women, were subjected to compulsory sterilization.” The authors point out the ‘3rd-and-a-half’ revolution’s countering importance: under Britain’s Margaret Thatcher, between 1975 to 1986, “the inflation rate fell from a high of 27 percent … to 2.5 percent.” Regardless, unable to shrink government sustainably, Thatcher and President Reagan “did not win the reality. Otherwise, this book might well not exist.”

The authors show how today’s California epitomizes the current need for a fourth revolution. Examining issues such as pension black holes, lobbying groups (both union and corporate), excessive state regulation (it takes a year to get hairdressing permits in California) and government largesse for Americans who don’t need it, the authors show a train of greed doomed to crash. With anecdotes such as these, along with tales of the faux-beneficence of communist economics —”nothing noble, just something fake, like doped athletes paraded at the Olympics” — the book urges dramatic reform.

They afford readers the knowledge of how a health entrepreneur in India has scaled hospitals to a level that produces U.S.-comparative outcomes at vastly more efficient levels and at 2 percent of the cost. They note the success of merit pay and merit-based appointment, and high expectations, in making Singapore a hub of public-service excellence. They explain how Sweden has used capitalist initiative to reform government into a responsive service provider.

The authors also admit that these reforms won’t be easy. In America, there is evidence of doctors unions’ reluctance to transfer power to nurses and assistants (lest their own earnings diminish). In education and agriculture, unions’ political patronage interferes, and the authors make it clear that change is seldom simple. They submerge readers in the “dark pools” of financial inefficiency that follow thousand-page laws such as Dodd-Frank. The authors show readers how the government sponsors the delivery of low productivity at growing cost.

“The Fourth Revolution” is not without flaws, however. It neglects Sweden’s small and homogenous population as a unique enabler of that nation’s success. It also ignores Sweden’s exceptionally high youth-unemployment rate. It makes a silly comparison between the moral costs of Marxism and the Tea Party movement. It gives EU single-payer health care a free ride on point-of-use service quality.

Still, in the end, this book’s success is rooted in its case studies that prove “something beyond doubt: Government can be made slimmer and better.” Facing aging populations and an entitlement-born disaster, this book offers an alternative to partisan “theaterocracy” and a call to much-needed revolution.

Tom Rogan, an American who grew up in London, is a columnist for The National Review and The Daily Telegraph.

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