Last night riding home on the EL, I read this in Common Sense Economics, on page 83.
Government is not a corrective device.
People have a tendency to think of government, particularly a democratically elected government, as a corrective device. They act as if government is something like a pinch hitter who can always be counted on to deliver the game-winning hit. This view is false. A democratic government is merely a method of social organization, a process through which individuals collectively make choices and carry out activities. There is no assurance that a policy favored by a majority will promote economic progress. In fact there is good reason to expect that, unless the impulses of the majority are restained, even popularly elected governments will often adopt policies that undermine economic progress.
They go on to illustrate their point with a hypothetical illustration, and then come to this conclusion:
When voters pay in proportion to the benefits received, all voters will lose if the government action is unproductive, and all will gain if it is productive. Therefore, when the benefits and costs of voters are directly related, large majorities will oppose unproductive projects in favor of productive ones.
Hmmm, this seems to be common sense true to me. So, I wonder how this applies to the “healthcare” debate? Any thoughts?
I think the authors are right, but I also think it’s a mistake to assume “economic progress” is a driver for many decisions within the government. Often it’s a different kind of progress that legislators (and their constituents) are pursuing and the government may well provide them with the means to achieve their goal.