Monday, June 20, 2016

On Utopia and Unicorns

Libertarians often face the accusation that we believe in utopia. "If people were all kind and generous," someone might say, "then we'd all get along and libertarianism would be great. But people are not uniformly good, which is why we need a large government to protect us."

In a way, it's an interesting argument because it begins by nearly giving away the store--of course libertarianism would be the ideal system!

But, at the same time, it's also effectively rhetorically, because it paints its opposition as the idealists. And few people over the age of 30 want to be idealists.

The trouble is that libertarianism doesn't assert any particular view of human nature, either bad or good. Instead, we simply assume that people tend to follow incentives and pursue their own self-interest. If they are incentivized to do bad or corrupt things, they'll often do those things. If they are incentivized to do good things, they will probably do those instead. Individual exceptions to the rule will always exist, but these are the general trends.

Most people would actually agree with the statement that people are motivated by their own self-interest. Some people may prefer to use an adjective like "greedy" and wish it were not the case. But this doesn't change the basic common understanding--that people pursue their own interests.

The core difference, then, between libertarians and everyone else is that libertarians apply this same assumption to everyone, whether they are in the government or in the private sector. Other political philosophies implicitly assume that people in government operate under a different priority--serving the public interest. But the people in government are just the same as people in the private sector. So why should we assume that winning an election will transform them into more moral and altruistic people than everyone else? Clearly, we should not.

And given that people in government and in the private sector all still follow incentives, the question becomes where are the incentives the best.

In the private sector, people pursue their own interest by providing goods and services to other people and businesses that voluntarily pay for them. If you want more money, your task is to provide better goods and services or provide them to more people. It is possible to achieve short-term gains through fraud or similar means, but the risk of getting caught is high and the consequences are severe. If you constantly rip off your customers, eventually you will have no customers.

In the public sector, the incentives are considerably different. If you're a politician, your self-interest is served by getting votes, and getting campaign contributions that help you get votes. You can get votes by genuinely making positive reforms that help people. But you can also get votes through pandering to special interests and dishonest fear-mongering. Judging by our current politics, this second approach seems to clearly be the dominant one. If you're a bureaucrat, the incentives may vary somewhat based on your particular job. One thing we do know, however, is that public employees in the US are much harder to fire than their private sector peers. And it likely goes without saying that this fact probably doesn't encourage excellence 100% of the time.

Thus, we might able to summarize the libertarian approach as follows: We think people in government have bad incentives and limited accountability, so we want the government to do as little as possible.

Other political camps, right or left, implicitly believe the following: We agree that people in government often behave poorly and are unaccountable. But, with the right people in charge and the right reforms implemented, it can be fixed.

Which position sounds unrealistic now?

Following on with this general theme, we're recommending a new article at the Foundation for Economic Education. It's called "Unicorn Governance," and the author persuasively suggests that most people who advocate expanding the government do so because they believe in a different kind of government. They don't want to expand a government with all the dysfunctions we know today, not really. Rather, they want to expand a different, conceptual government that works like they want it to in theory, even if it cannot be found in practice.

This is what the author describes as the "unicorn problem". Advocating for government policies based on an imaginary form of government makes as much as sense as advocating the use of imaginary unicorns as a serious mass transit solution. In short, we must confront the world as it actually exists, not the world we wish existed. Here's the link:

Unicorn Governance

No comments:

Post a Comment