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Friday, November 10, 2006
Why politicians do what they do
Russell Roberts writes in Cafe Hayek:
Take economics, for example. The basic truths of economics are unituitive: the idea of wealth being non-zero-sum is hard to fathom, as is the idea of spontaneous order. It seems intuitively obvious that a benevolent government is the easiest way to lift people out of the poverty, and that you must steal from the rich to give to the poor (which is what taxes used for distribution effectively do). It seems intuitively a good idea for the government to give poor people free rice or free TVs or whatever, not realising the cost these place on the economy on the whole, for those are not as easily seen.
Thus, it is natural that workers will support the kind of labour laws we have, and minimum wages, exulting in the noble intent of those policies and unaware that those policies actually harm them. (A job that never existed because of a policy will not be seen as a job lost, for example.) Populism is, thus, inevitable, and if a policy does not have popular support, there is no incentive for the politicians to change it.
And popular support does not always mean popular support. In this era of coalition politics, parties often come to power by catering to specific votebanks. Their loyalty, when they have any kind of share in power, is towards the perceived needs of that votebank, and no one else. The battles within a government over policy will often be between various interest groups claiming to represent these votebanks. The broader interests of the country and the economy rarely concern anyone.
Of course, well-intentioned politicians do sometimes get to power. Manmohan Singh seems to be one of them: he is not a traditional politician, and I'm sure he wants to do the right thing by India. But he heads a coalition, and has to cater to the public positions of some of his partners in that coalition, most particularly the Left. This reduces the extent to which he can make positive changes, especially on economics, where the Left is a destructive force: the policies they support largely destroy jobs (and prevent their creation), perpetuate poverty, and thus kill millions. But these are not easily visible by the general public -- and thus, they will continue for a while.
So let us not be under any illusion about the men who purport to serve us. They don't think of our greater good, but of whatever will serve their lust for power, without which they would not be in the positions they are. Such is politics, such is life. And to take my mind off it, I now depart for lunch. Thank you.
Update: Arjun Swarup writes in:
For example, a textile lobby is likely to push for tariffs on cheap imports of textile, so that they can compete. This may benefit the local textile companies, but it harms consumers all across, and prevents the money they would save by buying cheaper goods from entering the economy in other ways. Most interest groups have similar imperatives, and while reconciling their interests with sensible policies that benefit the general public sounds like a good idea, I'm not sure it can be done in practice.
Why is Rumsfeld gone? Why yesterday? Why not a week or a month before?Now, this may seem obvious, but we often implicitly assume otherwise. We think that if Policy X is good for the government, the government has reason to follow it. Rubbish. The government will only follow the policies that the people support, and those are not always the ones that are good for the country or the economy in the long run.
There is a simple answer. When you want to figure out why politicians do what they do, remember the simplest of rules:
Politicians do what they do to stay in office.
Take economics, for example. The basic truths of economics are unituitive: the idea of wealth being non-zero-sum is hard to fathom, as is the idea of spontaneous order. It seems intuitively obvious that a benevolent government is the easiest way to lift people out of the poverty, and that you must steal from the rich to give to the poor (which is what taxes used for distribution effectively do). It seems intuitively a good idea for the government to give poor people free rice or free TVs or whatever, not realising the cost these place on the economy on the whole, for those are not as easily seen.
Thus, it is natural that workers will support the kind of labour laws we have, and minimum wages, exulting in the noble intent of those policies and unaware that those policies actually harm them. (A job that never existed because of a policy will not be seen as a job lost, for example.) Populism is, thus, inevitable, and if a policy does not have popular support, there is no incentive for the politicians to change it.
And popular support does not always mean popular support. In this era of coalition politics, parties often come to power by catering to specific votebanks. Their loyalty, when they have any kind of share in power, is towards the perceived needs of that votebank, and no one else. The battles within a government over policy will often be between various interest groups claiming to represent these votebanks. The broader interests of the country and the economy rarely concern anyone.
Of course, well-intentioned politicians do sometimes get to power. Manmohan Singh seems to be one of them: he is not a traditional politician, and I'm sure he wants to do the right thing by India. But he heads a coalition, and has to cater to the public positions of some of his partners in that coalition, most particularly the Left. This reduces the extent to which he can make positive changes, especially on economics, where the Left is a destructive force: the policies they support largely destroy jobs (and prevent their creation), perpetuate poverty, and thus kill millions. But these are not easily visible by the general public -- and thus, they will continue for a while.
So let us not be under any illusion about the men who purport to serve us. They don't think of our greater good, but of whatever will serve their lust for power, without which they would not be in the positions they are. Such is politics, such is life. And to take my mind off it, I now depart for lunch. Thank you.
Update: Arjun Swarup writes in:
One of the best comments on this came from Bill Clinton - he said the true job of a politician is to resolve seemingly incompatible goals of different groups and work towards a common goal which benefits all.Well, the only statesman I know of in India is a newspaper. and I really don't see how a statesman would even get close to power in this country, given what one has to do to get there. Also, most of the time interest groups want things that harm many others in subtle ways unlikely to evoke protest.
Perhaps that is what distinguishes politicians from statesmen.
For example, a textile lobby is likely to push for tariffs on cheap imports of textile, so that they can compete. This may benefit the local textile companies, but it harms consumers all across, and prevents the money they would save by buying cheaper goods from entering the economy in other ways. Most interest groups have similar imperatives, and while reconciling their interests with sensible policies that benefit the general public sounds like a good idea, I'm not sure it can be done in practice.
