New York Times Admits I’m Right about Government Failure, but . . . . A Cautionary Tale for Classical Liberals

Over at the New York Times Robb Mandelbaum notes how the Small Business Administration has caved to political pressures and once again made the definition of “small” business so broad as to include virtually every firm in the economy. This was a key theme of two books I wrote in 1996 and 2001, including one cited by Mandelbaum:

Political pressures inexorably push up small-business size definitions. That, at least, is the theory of Jonathan Bean, author of a history of the S.B.A. provocatively titled Big Government and Affirmative Action. As the name suggests, this is not exactly a work of scholarship; it’s a polemic offered by an ideologue staunchly opposed to any S.B.A.-style intervention in supposedly free markets. Nonetheless, the events of the last several weeks suggest Mr. Bean has a point. . . In other words, we are all small businesses now.

There is a pattern I’ve observed over the years: I’m right but . . . the inevitable “but” to persuade the reader not to take seriously the work of classical liberal scholars. They may be right here but they are not “scholars.” Note the phrasing: “As the name suggests” [Big Government and Affirmative Action] “this is not exactly a work of scholarship; it’s a polemic offered by an ideologue staunchly opposed to any S.B.A.-style intervention in supposedly free markets.”

Shades of Rush Limbaugh or Glenn Beck! This guy is right but don’t take him seriously. That’s how the MSM marginalizes the scholarship of classical liberals.

In fact, as I wrote back:

Big Government and Affirmative Action received many scholarly reviews – not one negative. And it was based on research in numerous archives, including every presidential library for the time covered: Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Reagan. Plus interviews and agency records. Staying at youth hostels from Abilene and Austin to DC (and in between) was the price of scholarship. Even those who disagree don’t question the depth of research. . . . I could have saved all those road trips if I was truly an “ideologue”!

Serious scholarship is a drag in the research phase. Moreover, my conclusions were that markets were never free during this entire period (and earlier). Based on the evidence, I argued that the corporate welfare funneled through the SBA would never end because it involves attacking an agency wrapped in images of “Mom and Pop” and aid to “disadvantaged” minorities.

Of course, I don’t really assume that reporters read books. Mandelbaum spins his comments from the title. What a cheap shot: publishers insist on titles that will catch the eyes of potential readers.

The subtitle The Scandalous History of the Small Business Administration was confirmed more recently by the fraud associated with the Alaskan Native Corporations funneling set-aside contracts via the SBA to Halliburton and other huge corporations. This “fronting” is legal and it infuriates the Congressional Black Caucus who feel that this is “their pie.” However, my book (er, polemic) showed that other minorities (Asians, Hispanics) have been whittling away at minority set asides for years.

What makes this laughable is that Mandelbaum’s link to my book takes his readers to the publisher’s web site where there are snippets from leading scholarly journals:


“Bean is a master of administrative history, not just of the SBA but of the tremendous expansion of American government, especially beginning with and then flowing from the New Deal.”—American Historical Review

“His careful analysis, his all-encompassing bibliography, and his inclusive endnotes make this the definitive monograph.”—Journal of American History

“The first full-length academic assessment of the agency. At once a powerful argument for killing off the agency and a shrewd analysis for the political impulses that make its termination nearly impossible.”—Wall Street Journal

“[Bean] has a love/hate relationship with the SBA, and this tension is visible throughout his meticulously researched monograph.”—Business History

“Bean has done a model job in producing a smoothly written and often amusing policy history.”—The Independent Review

“This is a controversial interpretation of the history of the Small Business Administration and particularly of Affirmative Action. While some scholars may disagree with Jonathan Bean’s conclusions, none can ignore the deep research and forthright argument that he presents.”—Thomas K. McCraw

“With surgeon-like precision, Jonathan Bean peels away the layers of good-intentions, over-heated rhetoric, and racial politics of the Small Business Administration’s minority enterprise programs to reveal a history of corruption, fraud, and incompetence. . . . A courageous book.”—Donald T. Critchlow, Editor, Journal of Policy History

“Provides a critical analysis of the history of the SBA, which sheds light on the growth of government in the United States.”—Journal of Economic History

“Bean contends that this agency, scandal ridden and ineptly administered, was theoretically intended to open opportunities to all but has practically functioned as a leading wedge for racial preferences.”—Choice

“A well-written book about a troubled government agency. . . . Makes a significant contribution to our understanding of the postwar growth of the federal government.”— Reviews

“Provocative, meticulous, and engaging. . . . Reveals substantial common ground for political scientists and historians who share and interest in the political development of federal agencies.”—Political Science Quarterly

“Compact, yet extensively researched. . . . Bean’s work brings urgency to the central question: what can the U.S. government do to stimulate the development of black business”—Enterprise and Society

“A lucid account of how, having wrapped itself around ‘affirmative action,’ the Small Business Administration has managed to survive and prosper despite scandals and policy failures.”—Business Horizons

“A well-written, well-researched study.”—Wyatt Wells

But if the New York Times says these reviewers have it all wrong, well who is right?

Jonathan Bean is a Research Fellow at the Independent Institute and editor of the Independent book, Race & Liberty in America: The Essential Reader.
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