Here’s a letter to Boston Globe columnist Jeff Jacoby:
I write to applaud your superb January 2nd column, “Politicians are only human.” In it you eloquently convey a much-needed lesson.
Yet I pick a nit. You write about politicians that “their schemes and projects are about as likely to succeed as most endeavors are.” I think that here you err. In reality, politicians’ schemes and projects are much less likely to succeed than are those undertaken by persons in their private capacities. Here are some reasons why:
- Unlike persons acting in their private capacities, politicians spend not their own money but, instead, money belonging to others. It’s difficult to believe that when Mr. Smith and Ms. Jones each spends each other’s money the results are as desirable as when each spends only his and her own money.
- In markets prices convey relative values of alternative uses of resources and of different courses of action, thus not only informing each of us how better to act, but also giving each of us incentives to act in ways that increase our chances of succeeding in our own plans by helping others to succeed in theirs. In contrast, political projects are carried out either in willful disregard of prices (see point 1) or in contexts in which no prices exist. Political projects therefore are especially likely to be guided chiefly by hopes, fantasies, and hubris – all in ignorance of real-world constraints. (Indeed, the desire to escape real-world constraints is frequently the ideological fuel for political projects.)
- Unlike with government projects, no one is compelled to cooperate with, or to otherwise support, projects carried out in markets. Private actors, therefore, have far stronger incentives than do government officials to design and to operate their projects in ways that create as much value as possible for consumers and suppliers (including workers). Each private firm survives only by offering to all people who deal with it options that these people find to be the best available. Government officials, in contrast, can – and often do – force people to behave as these officials fancy.
I suspect that you don’t disagree with me here, but I thought it useful to keep the record straight!
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030