January 22nd, 2008

bswing

Do madmen elect political saints?

Ezra Klein writes:

“…Namely, as I understand Tyler’s worldview, he thinks individuals are a whole lot more rational and economically capable than I do. I think folks, in many circumstances, need a bit more help, and that, as beings fairly aware of our own irrationality, lapses in long-term attention, and assorted other deficits and shortcomings, we often smartly conclude that the whole is stronger and wiser than the one, and build communal institutions that sacrifice some autonomy but create structures better fitted to the messy and occasionally disappointing ways in which we actually engage the world…”

It’s curious that so many Democrats, having endured 6+ years of the Bush administration, have such great confidence in the ability of the irrational masses to elect wise and benevolent leaders.

Among the libertarians I know, most agree that their fellow often make wasteful, irrational, and shortsighted decisions. But that doesn’t mean that taking their decision making authority away from them and giving it to government officials will result in better outcomes.

If decisions are left up to us as individuals, and if we are held responsible for our actions, we will enjoy both the benefits of our good choices and pay the costs of our bad choices. Therefore, we have a strong incentive to take steps to curb our own irrationality. And if we fail, our poor decisions will primarily affect only ourselves and our close relatives.

If, on the other hand, we delegate control to elected officials, what reason do we have to believe that those officials will make better decisions than we will? If humans are irrational and wasteful with their own money, just imagine how they spend other people’s money. Consider the difference in how people order at a restaurant when the check is split equally, vs. how they order when everyone pays for their own dish.

Moreover, what happens when a government bureaucrat makes a bad decision? If you make a mistake as an individual, it’s clear you are responsible, and you suffer the consequences.

Government officials, on the other hand, are notoriously difficult to fire.

And not only do they not suffer for their mistakes, political incentives encourage bad decisions. For example, economists on both the left and right oppose farm subsidies as a waste of taxpayer dollars, yet $17 billion was spent in 2004 on direct subsidies to agribusiness. Why? Because agribusinesses are a powerful lobby, who spend millions of dollars to convince Congressfolk to continue their subsidies. The countervailing force is much weaker, because the cost of the subsidy is diffused across everyone in the country. Therefore, no single person or group has much incentive to fight against it.

Finally, an individual’s bad decisions primarily only affect themselves. The decisions of the federal officials affect everyone in the country — the only way to escape is to move out of the country.

Many people are shortsighted and irrational, it’s true. But that’s an argument against giving them power over others, not for increasing it.

Original: craschworks - comments