Why politics can’t work

Governments so frequently fail because they exist under a different set of incentives from business ventures. That is the problem with political solutions: from bottom to top politics is riddled with perverse incentives and very few beneficial ones. Even the best of people, in such circumstances, will make the wrong choices. We should assume that the differences between bureaucrats and business owners are actually very few. Both are motivated by self-interest. Both want to get as much as possible for as little effort as possible. That is human nature. Neither is any more evil or good than the other.

…The first fundamental difference between business and government is that business has competition. This means consumer choice, and that changes how service providers behave. A businessman might be rude to his customers but if they have a choice they will probably go somewhere else. When you end competition you end the necessity to make consumers happy.

…I tend to do my grocery shopping every day. I go into Pick ’n Pay and walk past thousands of products. I ignore most of them and pick only those which I actually want. I then take my basket of goods to the counter and pay. If I want less meat and more vegetables, that is what I get and that is what I pay for. I tend to walk out relatively happy. And if I’m not there’s always Woolworths.

But government services are a different matter all together.     If we use the grocery store analogy, then government would be like a store which hands you a predetermined basket of goods and you can not add or delete anything. They would determine how much mince and how much mealiemeal you might receive. Your own desires would be of little concern since the government has already removed the money to pay for the basket from your last pay check. Under such a system we all walk out with things we don’t want and we miss out on things we do want.

And, as we’ve seen earlier, the government does not benefit by making sure the basket of goods contains items consumers want. They are paid whether or not they put steak in the basket or mince, so you can pretty much guess which they will provide. In fact it is not very likely you will even get mince – you will probably get a soy meat substitute that tastes similar to cardboard instead.

RJ Bright is the pseudonym of an American author. This article is an extract from the book The Liberal Tide: From Tyranny to Liberty published by the Institute for Liberal Values, and may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.