How did it come to the point that federal, state and local
government systems are perceived as rent seeking opportunities? Moreover, do
such systems then lend to a notion that rent seeking is a natural, acceptable
and everyday way of doing business?
Beyond Buchanan and Tullock and all the other public choice
theory leaders from the school of thought known as the Virginia School of
Political Economy, one of the best quotes that sums up the current atmosphere
for rent seeking was made long ago:
"The state is
the great fiction by which everybody seeks to live at the expense of everybody
else." - Frederic Bastiat, French economist, 1850
Hence what you are
watching, observing and playing out is the end product of Bastiat’s observation
in which people manipulate a system and those same people think it's perfectly
fine, natural and required to play the game of rent seeking as it’s at someone
else’s expense.
How did Bastiat’s observation come to be present reality? The present U.S. state,
local and federal environment for rent seeking [beyond the mechanics explained
in public choice theory which is an explanation of how it all works after the environment
is created] goes back to the 1930's:
“Keynes was
exceedingly effective in persuading a broad group—economists, policymakers,
government officials, and interested citizens—of the two concepts implicit in
his letter to Hayek: first, the public interest concept of government; second,
the benevolent dictatorship concept that all will be well if only good men are
in power. Clearly, Keynes’s agreement with “virtually the whole” of the Road to
Serfdom did not extend to the chapter titled “Why the Worst Get on Top.”
Keynes believed that economists (and others) could best
contribute to the improvement of society by investigating how to manipulate the
levers actually or potentially under control of the political authorities so as
to achieve desirable ends, and then persuading benevolent civil servants and
elected officials to follow their advice. The role of voters is to elect
persons with the right moral values to office and then let them run the
country."
- Milton Friedman, Richmond Federal Reserve Economic
Quarterly, volume 83/2 Spring 1997.
The concept of politicos manipulating the levers is an
important Keynesian axiom that is missed by many as they want to concentrate on
spending, debt, tax, Keynesian economic models, etc.
The achievement of
desirable ends is another item much overlooked. That "outcomes" can
somehow be managed in a complex society through political planning. That is an
erroneous assumption and one can merely point to the results as evidence.
However, consider this observation:
"This way lies
charlatanism and worse. To act on the belief that we possess the knowledge and
the power which enable us to shape the processes of society entirely to our
liking, knowledge which in fact we do not possess, is likely to make us do much
harm.
But in the social
field the erroneous belief that the exercise of some power would have beneficial
consequences is likely to lead to a new power to coerce other men being
conferred on some authority. Even if such power is not in itself bad, its
exercise is likely to impede the functioning of those spontaneous ordering
forces by which, without understanding them, man is in fact so largely assisted
in the pursuit of his aims." - F.A. Hayek, from the essay The Pretense of
Knowledge
The next proposition one
should consider is the size and scope of government. That the mere
"size" creates the environment for shenanigans. From $800 defence
department toilet seats, to recent GSA parties, to our subject at hand of rent
seeking are all magnified by such size and scope. That is, if government was
limited in size and scope then shenanigans, would too, in the main, be limited in size and
scope.
What has been purposely-political
developed is a giant hulking money trap run by politicos and the manipulation
thereof by politicos creates an environment of rent seeking purposely promoted
by the system itself [a politically driven economy directed by politicos through the mechanaism of government rather than an economic
driven economy directed by free people in free markets, with government also based on economics rather than pure politics] as well as the size of the system itself [the sheer size makes
it out of control at the margins].
F.A. Hayek made an
observation many years ago that identifies the above problems as well as offers
a solution. It’s a solution not a panacea. Hayek observed that if the greater public
wants collective action to address a need or desire [defence, education, fire
protection, welfare, social security, etc., etc.] then government through
collective action can tax to create funds to address such items.
Keep this in mind: a tax created to fund. One then must
examine a fork in the road. How does one then go from the "fund
created" to implementation of the "action" that the fund is
intends to do??
Hayek argued two
choices exist for the created fund leading to the action phase: act through the
private sector or deliver through a created public sector. That is, if you now
want the "action" to occur, the delivery method appears as the next
step and two distinct choices appear: private or public.
The politico opts for public means as political power is gained
in a much greater magnitude than opting for private delivery of the action. The
political power leads to dependent political constituency building of the
public sector workers themselves and others that now supply items to the now
public and politico directed delivery system.
Therefore, in the
main, what you see, experience, and lament as "government" is not an
economic organization, it’s a pure political machine of the nth degree by, for,
and designed by politicos. The rent seeking pattern is promoted by the
purposely built political system. Further, rent seeking is welcomed by the same
politicos running the system as the rent seeking activity further dependent
political constituency exercises that politicos depend upon.
