The Policy Production Model

Subsystems, Policy, and the Siren of Consumerism

Underneath many of our current political contretemps is a failure to understand how policy is made. Most people have a simple, fairly monarchic, vision that policy is when the big men say “jump” and everyone else says “how high?” In a small enough society, but which I mean something not much bigger than a clan, that may be an accurate model; but in larger civilizations it misses a lot of the complexity. For the sake of explaining it students, many policy books describe this top-down policy model as one possibly mechanism through which elected officials can wield the state. The “government” issues orders which are carried out by “the state” and that looks, superficially, like the clan system of saying “jump!”

It is, however, a poor model of what we actually observe. We know that the state in the United States is not a unified thing. We know it doesn’t answer to any one group, let alone any one person. Different parts of the state may, frequently, even work at cross-purposes to each other. Even more bizarre, sometimes parts of the state work against each other at the explicit request of the Congress. Understanding this behavior requires a fundamental rethinking of what policy really is.

A Simple Model of Action

For an individual, action is merely a question of capability and will. It a person wants an apple, they simply reach and take the apple. The action will happen provided that the person is physically capable of making the correct motions and desires to do so. This is wonderful for an individual, but individuals are highly limited in what they can do. Complex actions require cooperation. So now the description of action needs to be expanded.

Two people need to lift a couch. What is required for this to happen? It is tempting to jump straight to the mechanical questions -can they physically make the correct motions and do they have the combined strength to carry the couch? But the question of will. Why are these two people moving the couch? Perhaps they are roommates moving into a new place together. But where, exactly, will they put the couch? Maybe they have consensus on this plan. Maybe they have discussed it and come to an agreement, or have cut a deal. The couch goes here, the TV gets mounted on the wall. Max Weber called this charismatic leadership, where the decisions of the group are made based on the ability of one or some of the members to persuade others to follow. Perhaps this is a family moving into a new house, and the question of where the couch goes is simply decided by the father. Weber called this the traditional form of leadership.¹ While the source of authority in both cases is different, what the two forms have in common is that the authority is also the one making the decisions and seeing them carried out.

Neither of these methods scale beyond personal relationships.

So as states developed in the 16th century in Europe (much earlier in Asia) the new kings and governors needed a technology² to expand their powers beyond their personal power base. They came up with two basic ideas: federalism and bureaucracy. Federalism is a relative of feudalism in that both of them solve the problem of scale by limiting the vertical span of decisions. In the United States, the Federal Government has no real ability to solve local problems via its normal processes, so they don’t try. Instead, local problems are addressed by local governments that are created by the state governments. States and Federal governments interact with each other all the time via their formal processes (we call it the Senate), but we also have ad-hoc and informal processes that allow local governments to interact with the Federal Government (we call them the House of Representatives). But while local interests do get representation in the Federal Government, their issues only get formal review if they are considered important tot he states or the nation as a whole. Congress does not usually concern itself with a specific zoning code.

Federalism works very well, but it works by distributing power widely throughout society, which at least from the King’s perspective is a problem. Thus, most major state-building attempts involve the creation of a bureaucracy that has the power and knowledge to make local level decisions but that answers to the unitary government -the King. According to Weber, these bureaucratic forms lack authority in their own right and so cannot make decisions. Instead, those who hold authority delegate the power to make decisions to the bureaucrats and then keep the bureaucrats in line by paying the bureaucrats for their service, and firing them for being disloyal.

In America, you elect your local officials and they are largely immune from Federal interference. They have the authority to make decisions, those decisions are largely not reviewable by another branch of government, save lawsuits in the courts (which is, itself, a 20th century innovation), and the only way to remove them is by voting them out. These are all traditional style authority controls. In England, you elect your local officials and they are under the control of the Parliament.³ But Parliament doesn’t have the ability to oversee local governments, so they farm it out the Ministry of Housing, Communities, and Local Government, which is a bureaucratic office.

So, for large organizations, the model of action is that the governor makes a decision and the bureaucracy that answers to that governor carries it out not because the governor is charismatic or because the governor is elected, but because the governor pays the bureaucrats to do what the governor wants, and if the bureaucrats fail, the governor fires them.

Organizational Form

In example form, I’ve used governments, but a few moments reflection should reveal that I’m describing almost all large organizations. Bureaucracy is the industrial model technology for augmenting power and authority and so any large, industrial organization is going to use it. Even supposedly post-industrial organizations, the moment they start getting beyond the scope of personal authority, implement either federal systems (semi-independent circles) or bureaucratic systems (hierarchical chains of authority).

Bureaucracy is a very powerful technology.

But technologies work by acting on other forms of capital -so neither bureaucracies for federations do anything unless they can access resources. And this is the production model of policy.

The top-down model, and the broader "consumer” model of policy says that the way to get policy change is to go to the person with authority and say “I want X.” If the person in authority agrees with you, that person orders the state to do X. And the state does. However, we know that the exact same technology being used by the state is being used by large industrial organizations and we know full well that this isn’t how large organizations work.⁴

So, too, with policy. Making a policy is a matter of securing the necessary forms of capital to make the policy, then securing control of a technology that can act on those forms of capital to make the policy. The exact capital needed varies from policy to policy, it is still capital: money, manpower, machinery, or materiel.

Once a production line is in place, it is then very hard to dislodge because all those forms of capital are tied up in the production line. Anyone who wants to disrupt the line needs to either pry one of those forms of capital loose, or else create a competing production line using entirely different capital sources.

Funnily enough, Mancur Olsen thought Republicans would be good at this, because, after all (in the 1970s), the Republicans were the party of Capitalism and Business, and obviously businessmen knew exactly how to do this. But it is actually the Democrats who are the masters of policy production -and have been since Aaron Burr. After all, their primary governing technology was and is the political machine.

Machine as Policy Manufacturer

Studies of political machines tend to focus on their corrupt influence over elected officials. In many ways, this misses the point. If machines cared about elected officials, they’d simply get themselves elected. Clearly they have the capability. Political machines exist to deliver policy to their supporters, but -very important -to do so in a way that makes the machine invaluable to their supporters getting the policy. It does no good to provide the policy benefits if doing so obviates the need for the machines.⁵

Originally, the machines were usually the providers of money -or more accurately, the machines were the launderers of the state’s money. Federal and State money would flow to the machines, and the machines would use that money to provide jobs and housing to voters. The machines, in turn, provided the manpower, and often the materiel, needed to make a policy work. Businesses were tied into the machines -as were labor unions. If a policy needed construction work, the machines had a company that could do it. If a policy needed lawyers, the machines had a firm.

Today, machines are more subtle, but no less necessary. The Federal and State governments cannot provide the results their voters want directly, so they instead funnel money through grants and contracts to organizations that will provide those services (one of which is employment). Traditionally, Democrats funneled money to non-profits, which employed tons of Democrat voters and provided social services to tons of Democrat voters. Republicans contracted government jobs out to private companies, that were owned by and employed Republican voters (think the Defense Industry). Republicans have been historically weak on the “delivering services to their voters” part, but they aren’t unaware of the issue. This was why Bush wanted the Office of Faith Based Initiatives -to funnel money to Republican leaning church groups. Part of the story of Republicans as the Stupid Party (and losing California) was the decision to downsize the military after the cold war; a choice that differentially affected Republican machines negatively and Democrat machines positively (the so called Peace Dividend). It’s a mistake the Republicans have never been able to fully recover from.

Subsystems and Sledgehammers

The machine system I’ve described is generalized to what are called Policy Subsystems. Subsystems are like the policy equivalent of Firms. They are organizations, or groups of organizations, that control capital and technology and use capital and technology to produce policy. As noted above, Democrats are better at it than Republicans.⁶ So, does that make the situation hopeless?

By no means. Subsystems are as stable as any other large American firm.

Which is to say: fairly stable, but not impervious. And a fairly straightforward way to cripple a subsystem is cut off its access to resources. The reason elections matter is because the Federal and State Governments direct, in one way or another, massive amounts of the resources in the United States. It isn’t just money. It’s people, through taxation and subsidy (especially of education and accrediting bodies). It’s materiel, through industrial policy and regulation. It’s land through direct ownership and other regulations.

Is DOGE deliberately trying to cripple the Democratic machines and subsystems? I have no idea, but it is one of the effects of what it’s doing. It’s also the reason why there are so many calls to defund Planned Parenthood or tax the Endowments. (And Democrats aren’t stupid, they understand this too, which is why they want to tax Churches -which, remember, are one of the few places where Republicans might be able to machine build.)

Those who wish to change policy, regardless of place or level, need to understand that policy is the result of a productive process. If you want a say in the policy, you need to be part of that production. Policy Consumers get what the Producers offer them.

1. Traditional in this case does not mean “this is the way everyone has always done it, so that’s how we do it” rather it means that “the person we are following holds the position of leadership because of the traditions we use to pick the leader.” Patriarchy, heredity, but also election are all traditional methods of leadership.

2. Technology is a huge concept. Today what we mean by it is “something which acts on forms of capital to transform them into something else.” So a lathe is a technology, but so is the family, so is reading, et cetera. To really mess with your head, some forms of capital are also technologies because machinery and human capital work by transforming other forms of capital. When I get around to talking about economic development, heads will spin.

3. For the sake of completeness: in the US Federal system, local governments have no formal place. They are created by the states which are, for this purpose, unitary systems. So, yes, if a local official is doing a bad enough job, the state government may provide for the governor or attorney general to remove the official. Doing so is usually a political firestorm.

4. Or, maybe, we don’t. But I hope here you are recognizing that the consumer model of policy is akin to the “food comes from grocery stores” fallacy. If you go to the CEO of the grocery store and demand a food that no one produces, the CEO has no way to provide it. Same is true for policy.

5. This was the actual meaning of Republican’s 1920s campaign slogan “A chicken in every pot and a car in every backyard.” That workers could get the prosperity of machine politics without having to vote for the machines. This was, maybe less deliberately, also the sentiment behind George W. Bush’s “Rising Tide” platform. Republicans are never going to beat Democrats at machine building, so their only hope is to provide the same benefits without having to vote for Democrats (who have always been corrupt and crazy -see California -but people tolerate it because Democrats deliver).

6. There’s a self-serving version of the explanation for this which goes “Republicans are just too ideologically pure to stoop to buying votes the way Democrats do.” It’s a feel-good justification for losing, but it probably isn’t true. Republicans frequently try to set up these kinds of machines but Democrats have been doing it for longer and have tied up most of the necessary resources in things like the Great Society and New Deal programs. Dislodging those resources requires getting the current members of the Democratic coalition to switch sides -which most of them have no interest in doing (they’re getting paid). And people most interested in adjusting those policies therefore go into the Democratic party, because that’s where the organization is. That leaves Republicans only one real strategy: organize everyone who loses from Democratic Organizational Stupidity to vote for anyone but the Democrat. This has been the Republican Strategy since it was the Whig Strategy of Henry Clay. The strategy works really well, but it has one major downside: you win on the platform of “not Democrats” which means all the resource holders you managed to split off? They don’t agree on the new policy organization. Which is why repealing ObamaCare is easy. Replacing it is nearly impossible. ObamaCare is a wonderful machine for paying resources holders to cooperate. John McCain remains a terrible person for knifing the GOP on the repeal, though.