March 1, 2015

Review Corner

Their calculations are at odds with those of businessmen, their market counterparts . Whereas the latter asks how much people want something, the equivalent of asking what they are willing to pay, the politician asks how many people want something. [...] Legislating tax policy is a process of give and take, but those being taken from are seldom part of the conversation.
Public Choice Theory marries the consequentialist and rights-based argument for libertarianism. And Randy T. Simmons's Beyond Politics: The Roots of Government Failure bakes the cake and puts the handsome couple on top.

Simmons uses just enough economics to ensure a factual underpinning. I don't think any interested reader would feel overwhelmed with theory and charts. Yet there is enough for a serious reader to see the projected and actual effects of previous policies. And it raises the work above polemics.

Despite the importance of individual preferences in democracies, a number of otherwise attractive political features have the unhappy facility of violating Paretian efficiency. The two most prominent involve redistribution of income. Redistributive gains dominate efficiency considerations in policy discussions, and democratic institutions encourage this redistributive propensity. In addition, democracy has an unfortunate but a distinct penchant for enacting inefficient proposals-- proposals that make some better off but at the expense of others or even worse, making everyone worse off in the long run.

Ruminations on Pareto efficiency always gets you invited back to the best cocktail parties. But for a non-strident, non-polemical book, Beyond Politics advocates for a vastly limited government. All the popular arguments for government interdiction for labor, safety, alleviation of poverty, and imposition of medical code standards are comprehensively dismantled. Society as a whole will be worse off and the solutions will be less innovative and less effective than those subject to the trial of market competition.
The great accomplishment of modern public choice has been to demonstrate the pernicious workings of the visible hand of politics. The same decision makers operating under market and political rules produce quite different results.
[...]
Judges force the redesign of everyday tools and airplanes. They decide if surgeons in operating rooms were acting appropriately or if CEOs ran their financial firms appropriately. They are the most powerful regulators in the American system. And with each new , groundbreaking decision a judge's status in the legal , media, and academic communities increases.

Simons does not come up with many public goods better provided by government. Protect property rights, adjudicate disagreements and let free exchange handle the rest. He quotes both Coase and Bryan Caplan extensively. You cannot compensate for thee failures by invoking democracy or popular consent -- the system has many misplaced incentives built into it.
In Latin "votum" or vote means "ardent wish." But obviously many American voters are not terribly ardent and are, in fact, highly frustrated, which explains why the right to vote is not regularly exploited by many citizens.

Accessible but serious: five stars.

Review Corner Posted by John Kranz at March 1, 2015 10:31 AM

Okay I'll bite - First Ayn Rand explained why a proper government only engages in the protection of individuals from other individuals. Now Utah's Randy Simmons concurs, saying that most "public goods" aren't good - that protecting property rights and adjudicating disagreements are the notable exceptions. So we must ask why then, does government continue doing things that are not in the best interest of the citizenry? Why do folks like us go along with the legal, though immoral, violation of so many of our freedoms?

Posted by: johngalt at March 7, 2015 9:17 AM | What do you think? [1]