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Commenting on the government of his native commonwealth in the mid-19th century, the libertarian reformer William B. Greene remarked that while “[s]cientifically speaking, the government of Massachusetts is socialistic; practically… it is plutocratic.” Greene’s point is enormously underappreciated in the popular political conversation today. Even when collectivization through the state purports and desires to serve the poor and less fortunate, it will, as a matter of practice, be operated in the interests of the rich and powerful.
The Catholic intellectual G.K. Chesterton, who advocated the distinctive philosophy of distributism, similarly remarked the existing political and economic system was “a sort of plutocratic collectivism.” It turns out good intentions notwithstanding, concentrating power and collectivizing resources doesn’t actually help the greater number of people in society.
We often simply assume “the public sector” must operate for the benefit of the public good, whereas “the private sector” is the realm of greedy corporate-types. Like the left-right political spectrum, our institutional nomenclature is inadequate, unable to accurately explain the social phenomena to which it applies. Indeed, our oversimplified system of labels often hides important subtleties. Momentarily dispensing with these terms allows us to get behind them, to consider the actual behaviors and architectures they represent and the incentives that operate through and within them.
For example, what happens if we suppose people who work in government are essentially just like everyone else? Perhaps, as the economist Knut Wicksellpointed out, “They are not pure organs of the community with no thought other than to promote the common weal.” Of course, this general truth long predates both Wicksell and modern public choice theory. But it is a monumental insight that, if taken even half-seriously, would change the entire landscape of the debate in political philosophy and public policy.
When it comes to the “public sector,” to government actors, we guard our incredibly tenuous assumptions so assiduously that we lose sight of the underlying human beings, who, of course, are normally self-interested and deeply implicated in power dynamics. We have allowed our social and political terms of art to overshadow such dynamics, to take precedence over careful examinations of the relevant behaviors.
The question with which we ought to be concerned is, what mechanisms make the individual or institution under consideration accountable? What incentives do they have to act in accordance with our charming theory about how they will act? Policy wonks and political theorists seldom deign to bother with these questions. This is one of the many reasons why classical liberals seek to confine government, which is only the institutionalization of coercion and compulsion, to certain narrow functions.
It is not at all clear what acting for the public good means if it signifies something more than acting for the good of each of the public’s component parts — that is, actual individual persons. Perhaps the public good implies some kind of utilitarian framework, in which, in Jeremy Bentham’s famous formulation, “it is the greatest happiness of the greatest number that is the measure of right and wrong.” In this kind of utility calculation, individual citizens are, in principle, expendable; their happiness, or lack thereof, is only a means to an end, an infinitesimal value in a vast equation that represents society as a whole. Were we ever able to discover such an equation for the maximization of societal happiness, government would more likely impede movement in its direction than contribute to its realization.
This points to a basic problem with the lofty appeals made by politicians and bureaucrats to the public or common good: When they make such appeals, they never bother to define it, and very rarely are they asked to. We simply take their invocations of this high-sounding ideal at face value, satisfied that other people (experts, as it were) will sort out the details. But, as we have noted, these experts have no real incentive to act any more selflessly than do private citizens working in the private sector — even assuming, arguendo, that we could all agree upon the meaning of the public good, which, again, we can’t.
There are no perfect solutions to these enduring social and political puzzles, but the best ones involve taking incentives sufficiently seriously that we balance them against one another, conscious of the dangers of concentrating power.
We find this kind of balancing in the Framers’ admittedly abortive (abortive because the executive branch has now effectively commandeered all three functions) attempt to separate the federal government’s legislative, executive, and judicial functions. Intermingling the financial interests of millions of individuals without their consent creates serious incentive problems, conflicts of interest, and opportunities for abuse. This problem is ordinarily just assumed away; after all, the hearts of all involved are in the right place, devoted to the public good. I submit that we should start holding government and the people who run it to the same standard of accountability we apply to everyone else — no more, no less. This simple move would alter the entire picture of what we want government to do.
[Originally Published at the American Thinker]