Why Should We Believe Their Motivations Have Changed?
August 29, 2011
By admin
Another good column from Dr. Boudreaux. Here is the thesis in a nutshell. If we believe that private actors are always looking out for their own best interests instead of the “common good” (we’ll leave that ambiguous phrase for another day) and can not be trusted … why should we all of a sudden trust them to be looking out for the “common good” once they reach a political office?
pretenseofknowledge.com
Clear eyes on government
By Donald J. Boudreaux
Friday, August 26, 2011
One of my fondest memories as a George Mason University faculty member occurred on a crisp October morning in 1986. As I drove onto campus, I beheld a swarm of trucks and satellite dishes near the Department of Economics. How odd!
The media were on hand to interview the newest Nobel Prize-winning economist, my colleague James Buchanan.
Jim, his longtime co-author Gordon Tullock and their team of "public choice" economists had moved in 1983 from Virginia Tech to GMU, where they continue their research into the nature of politics.
Before the "public-choice revolution" -- which began in the 1950s (largely through the work of Jim and Gordon) -- most economists had embarrassingly childish views of politics and government.
Economists have long assumed that private-sector consumers and producers act chiefly to promote their own self-interests. This assumption is both realistic and the foundation of much of the knowledge that economists since Adam Smith have contributed to public understanding.
But when analyzing the public sector, economists naively assumed voters and government officials are motivated by concern for the general public and not by their own self-interests. That is, the same person who was assumed to act to increase his own well-being as much as possible and to have only limited knowledge about the way the world works when serving as president of, say, General Motors, was assumed to cast aside concern for his own well-being and to become blessed with encyclopedic knowledge and wisdom the moment he takes the oath of office to serve as, say, president of the United States.
One unfortunate consequence of this schizophrenia in economists' analysis was excessive trust in government.
With all markets always being imperfect, it's easy to build a fancy economic model to show how government can correct the problem. If you assume you've got God's ear, why tolerate a reality full of imperfections if you can advise God on how best to make matters ideal?
It's not excessive exaggeration to say that, before the public-choice revolution, the typical economist fancied himself or herself to be an adviser to a secular god -- to government. This secular god was assumed to be eager to receive economists' scientific advice and to apply this advice dispassionately in the public interest.
But Jim, Gordon and a few other similarly clear-eyed economists realized that too much of what government does (and doesn't do) reflects simply the narrow self-interest of government officials. They enjoy the perks of office, craving its power, prestige and gaudy trappings. They understand that election to high office results not only in public acclaim but also in opportunities to make a great deal of money. (Each year for the rest of his life, Barack Obama will earn -- in consulting fees, speaking fees and book royalties -- multiple times more than he would have earned had he remained a law professor.)
How else to explain, for example, tariffs' continued prevalence? Nearly all serious economists advise that protectionism makes nations poorer. Public-spirited government officials, therefore, would consistently oppose protectionism. But such opposition is rare.
It is rare because elected officials understand they'll get more votes by granting favors to vocal producer groups than by doing what's right for the general public. "So the public be damned," murmurs the politician. "I want to be re-elected."
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