Thursday, December 06, 2007

Baptists and Bootleggers

Via Russell Roberts Cafe Hayek blog:

We should be realistic about politicians. George Stigler used to contrast his theory of politics with Ralph Nader's. In Nader's view, all of the ugly aspects of government were caused by the wrong people getting elected. If we could just elect better people, then we'd get better policies. Stigler argued that it didn't matter who the people were—once they got in office, they responded to incentives. They would convince themselves that they were doing the right thing, either because they really thought so or because doing the wrong thing was necessary in order to be able to do the right thing down the line.

Being a Stiglerian in this area, I expect less of my politicians and I am rarely disappointed. Even those politicians we think of as principled, pursue the calculus of the bootleggers and Baptists. Ronald Reagan, an eloquent defender of free trade, imposed "voluntary" quotas on Japanese cars. That is the way the world works.

This is the best argument for smaller government that can be made. Politicians, of whatever party, almost always do the wrong thing.

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