View Full Version : Economics is Fun, Part 17: Public Choice

03-27-2012, 07:22 AM

"The effort of every person to maximize their advantage...." ~Adam Smith

03-27-2012, 05:17 PM
good one, as always.

03-27-2012, 05:40 PM
Very good explanation of public choice, and the dangers especially in the case of legislature.

The "trick" is to get them to operate in our interests as well as theirs...so how do we do that?

03-27-2012, 08:31 PM
Popper, Open Society, distinguishes personal and institutional elements of government: "All long-term politics are institutional. There is no escape from that, not even for Plato. The principle of leadership does not replace institutional problems by problems of personnel, it only creates new institutional problems. .. But it must be said that a pure institutionalism is impossible also. Not only does the construction of institutions involve important personal decisions, but the functioning of even the best institutions (such as democratic checks and balances) will always depend, to a considerable degree, on the persons involved. Institutions are like fortresses. They must be well designed and manned."

While not perfect, they are more objective.

We see that right now in the Obamacare case before SCOTUS.

Federalism is another example.

An informed rational electorate would be a good institutional guard against public choice in politics. '"Every government degenerates when trusted to the rulers of the people alone. The people themselves, therefore, are its only safe depositories. And to render even them safe, their minds must be improved to a certain degree." --Thomas Jefferson

03-28-2012, 08:29 AM
Unfortunately, the Founders almost managed "well designed" but as I have noted on several occasions, they missed the boat when they failed to see that their new system would develop a ruling class just as the old system did. They assumed that the spirit of temporary public service that they had would continue into the future. As we all know, what has happened is quite the opposite. The U.S. is being controlled by a ruling oligarchy of mainly leftist judges, bureaucracy and perpetually incumbent "elected" politicians. The result is predictable, they have everything to gain from bigger and more invasive government so they keep building same.

The radicalism you see from the Federal government cannot be explained by just looking at the relatively few people who come and go with each admnistration. The bureaucracy itself is quite leftist and statist and basically what Obama did was turn this much larger group loose. This is why you see this flood of control-freak crap coming out of D.C. in far greater volumes than before Bush and then Obama got elected.

The best hope for the American people is that the U.S. Federal government will simply run out of money and collapse. That is basically the only way you are going to get rid of these people.

03-28-2012, 10:57 AM
For an even more devastating criticism of the American merchant-state, based on conquest and exploitation, along the same lines as you argue, mainecoons, see Alfred Jay Nock's Our Enemy, the State (http://mises.org/etexts/ourenemy.pdf). His argument, boiled down to the simplest terms is the west merely replace the feudal state (merchantilism) with the merchant state (corporatism). What we today call crony capitalism.

(If you're strongly patriotic, don't read. :-))

03-28-2012, 07:27 PM
Here's a piece comparing personal and institutional functions of government, Madison’s Last Stand (http://www.nationalreview.com/articles/294484/madison-s-last-stand-rich-lowry)
In the mind of contemporary progressivism, these words of Madison from the Federalist Papers simply don’t compute: “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite.” They are an antiquated 18th-century sentiment unsuited to our more complex and more sophisticated time, to be ignored when not actively scorned.
But Madison thought this division of power so important for a reason: “In the compound republic of America, the power surrendered by the people is first divided between two distinct governments, and then the portion allotted to each subdivided among distinct and separate departments. Hence a double security arises to the rights of the people. The different governments will control each other, at the same time that each will be controlled by itself.”

The entire system is meant to maximize accountability and competition in the belief that the undue accumulation of power in any one source is, in Madison’s words, “the very definition of tyranny.” The frequent Supreme Court swing vote Anthony Kennedy has written that “federalism was the unique contribution of the Framers to political science and political theory.”