Warfare, welfare and the follies of planning.
Economics is boring to most people. But properly applied it gives us insights into what works and what doesn't and why.
The Left pretty much avoids economics. And with good reason. It dispels the validity of their favoured solutions to the woes of the world.
We recognise that there is a world of difference between the incentives created in markets and the incentives created in bureaucratic structures. And by recognising the differences we are able to project why certain policies fail.
Consider just a few of these insights, off the top of my head.
First, the economist would note that the intentions of the planner, bureaucrat, or politician is not of much importance. The incentives in the system matter, not the personnel. Good people will be no more able than evil people to get the results right. The incentives work against them.
For instance in a market the more effort the entrepreneur makes to satisfy a client the greater his personal financial rewards. Making 100 customers happy is far more profitable than making 10 of them happy.
But take the typical government department. If a department waits on 100 customers it has ten times the work load but there is no ten fold increase in income. Their income is not tied to customer satisfaction. In both cases the individuals want to get the most they can for the least effort. In the market system waiting on ten times the customers brings in ten times the income. Not so in the bureaucratic system.
In both cases the desire to improve one's own life is dominant. But the market system allows this only when customers are satisfied. The incentives change the behaviours of the participants.
Ditto for consumers. If you consume twice as much food in the restaurant as others you will pay twice the cost. In politics your payments are not related to your costs. You can consume as much as you want and won't pay anything else.
Now combine those two things together. Politics thus encourages greater demand for politically provided services while at the same time encouraging a supply well below the demand. The net result is a constant shortage. So the incentive is to constantly expand the size of the bureaucracy. Hence government just gets bigger and bigger.
When critics of social welfare point out the failures they get a litany of excuses from the Left. We are told: "There isn't enough money?"
"The wrong people are managing the program."
"We need more employees."
"We simply need more time."
Over and over they have excuses for the reason that their programs fail. It was the wrong plan and the right plan will fix it. It was the wrong planner but the right planner will fix it. It is the right plan but not big enough. It goes on endlessly.
They never once consider that the problem is systemic. Things fail because the system of political provision of goods and services is inherently counter productive. It fails because it can only fail.
Conservatives love to note all these same arguments and they relish them when used against the favoured programs of the Left. But the real difference between the Left and the Right is not that one favours central planning while the other does not. Both favour planning but disagree over the programs to plan.
The problem with the conservative is that, while he understands the causes of government failure for Left-wing programs, he mistakenly or dishonestly assumes that these same causes have no bearing on his own programs.
Programs to wipe out poverty don't work, he argues, because the system creates unintended consequences. Tampering with the machinery of society leads to problems that one could not anticipate in advance. And the more a society has evolved with a complex social structure the more likely that intervention by the state will produce unexpected and unwanted results.
The Left then argues that the solution to these unintended problems is more planning. But libertarians argue that all this does is compound the problems. It layers errors upon errors making it far more difficult to extricate oneself from the self-imposed crisis. Conservatives would laugh if the results weren't so tragic.
But then bring in foreign interventionism and see who drags out the same old excuses for failure. If the war goes badly it is because....
....the wrong people are fighting it;
.... we don't have enough resources;
....we are being undermined by (fill in the blank);
....the plan was wrong but now the right plan will fix it
....we simply need more time.
Central planning does not work for agricultural production says the conservative but it works for centrally planning the entire Middle East. There may be unintended consequences from welfare but not from warfare.
In the end the Left and the Right both embrace central planning but argue over who is to plan and what is to be planned. They don't disagree in fundamentals at all just on the application of the principles they both share.
All items in this journal reflect the personal opinions of the author and are not necessarily those of the Institute for Liberal Values or its Board members.
Previous (Welfare and values.) - Next (The lunatics are running the asylum or the unintended cosequences of US intervention in Iraq.)
Nannies to Right of Us, Nannies to the Left of Us.
Welcome Home: the journeys of David Mamet and George McGovern.
Dominion Post in needless panic
Does Liberalism Have a Heart?
The moral problems of state power in regards to war.
Kiwi health: spend more, care less
Hurricanes and hot air: the sequel
Morality and Consistency: Why Left and Right both threaten freedom.
Ageing, population and the welfare state.
The bankruptcy of conservatism.
More journal entries...
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Institute for Liberal Values, Thursday September 9th 2010. |
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