Posts Tagged ‘Economics’

So for a moment, think of government as just another business, as I often do.

What other business out there asks its customers how to perform its day to day operations? I can only imagine what would happen if grocery stores held periodic elections and referenda to decide what sellers to buy from and how many baggers to employ. We’d all starve.

The wonderful thing about markets is that via competition and prices, we tell the grocery store what we want, not how to give it to us. We provide businessmen with ends; the means are at the discretion of the most able. If you think you have a better handle on how to run a grocery store, go take out a loan and get rich.

What always bothers me, reading the editorials and the op-ed pages, is that it’s all backseat driving. Who’s to say who is right? It’s as crazy as if we had newspapers, television networks, and daily debates about whether or not Wal-Mart was running as well as it should, or implementing the optimal policies. It makes me think that maybe we don’t know as much as we think we do about what the government should or should not be doing. Maybe it is all a little less ideologically cut and dried. We can have an idea that some policies work and some don’t, but I think it’s all a bit hazier than we allow ourselves to believe.

This is not to even mention the sad fact that while we debate policy, the electorate usually holds multiple, conflicting opinions of what ends are desirable. “Social justice?” Prosperity? Equality? It further complicates policy problems that are by their nature unclear.

So here we have this dual problem: we can’t agree on what we want from government, and we certainly can’t agree on how it should be achieved.

However, this strange way of looking at politics actually yields a conclusion that readers of this blog will agree with. Imagine our car companies or banks were an arm of the government, and therefore run by popular vote, like my hypothetical grocery store. It doesn’t take a lot of thought to realize how inefficient that would be. It’s an intuitive reason for government to stay as far away from industry as possible. As voters, we have this unmanageable behemoth of an organization to run, collectively, for what purpose we’re unsure. We might as well keep that problem as isolated as possible, and allow markets to work where they can.

Paradoxically, this view takes the pressure off market-oriented arguments. Free marketeers don’t need to be so on edge in refuting market failure arguments. It’s a core tenet of Masonomics, actually: markets fail, but governments fail worse. (Forgive my use of “we;” I’m not using it in the moralist-collectivist fashion Kling describes.)

Well, at least the politicians haven’t gotten their hands into anything important yet, like finance, or healthcare…

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