The Timelessness of Budget Knavery
In today's world, large scale infrastructure proposals must be "sold" to those who control the budget. Rosy predictions help make the sale.
Large, modern infrastructure projects requiring government funding must be justified to those who control the purse strings in order to win approval. This puts the backers of a project in the position of needing to paint the most appealing cost/benefit portrait of their proposal.
Expenditures, advocates profess, will be a model of fiscal responsibility, while the resulting value to the public will transcend expectations. Later, during the construction process, if additional funding should be needed, advocates may justify their request on the grounds that to withhold additional funds would be a waste of accomplishments and expenditures to date.
Rosy predictions are not strictly a modern problem.
Who can doubt that there is a built-in incentive for those representing a proposal to err on the side of rosy predictions. And given the complexity and competitive nature of today’s infrastructure initiatives, this may seem like a modern problem.
But consider this indictment:
It is too common for architects and engineers to act upon the principle that the people ought not to be informed at first of all the amount of expense, and all the difficulties of a public undertaking, lest they be deterred by an apprehension that they are insurmountable. Such men tell us that it is best, if possible, to exhibit calculations somewhat less in the result than may be requisite, that the people being once induced to commence and continue till the work is two-thirds or three-fourths advanced towards its accomplishment, they may be under the necessity of supplying the rest, that what has been already expended may not be wholly lost. This differs little, if any thing, from absolute knavery.
This cautionary description of the budgetary process would not be out of place written on this morning’s editorial page or heard on the floor in the current legislative session. (Although the reference to “architects and engineers” would likely be replaced by “developers and politicians.”) But the quotation is from 1828, nearly 200 years ago.
Joseph Caldwell warned North Carolina then and now.
Joseph Caldwell, first president of the University of North Carolina, advocated for public funding of “internal improvements” – what we call infrastructure projects. But while he lobbied for canals and for a cross-state railroad, he condemned less-than-forthright inducements to commit state money to these “public undertakings.” Even if modern internal improvements are of a technology and a scale far beyond his experience, Caldwell’s 1828 words resonate for us today. Budget knavery of exactly the same type he described is something we still need to guard against.
One recurring lesson from the study of history is that the more things change, the more they stay the same. Underneath the superficial details, many of the issues we wrestle with today are issues that our ancestors wrestled with as well. Or, as novelist William Faulkner famously pointed out: “The past is not dead. In fact, it’s not even past.”
Portrait of Joseph Caldwell courtesy of The North Carolina Collection, Wilson Library, University of North Carolina at Chapel Hill
The quotation is from Joseph Caldwell’s influential publication “The Numbers of Carlton,” in which he advocated for North Carolina to embrace a new transportation technology: the railroad.