- When Will the Music Stop? No One Knows, But When It Does the Bill to Taxpayers Will Be Huge - October 8, 2018
- Lessons from Other Countries: an Unprincipled Appeal to Authority - October 5, 2018
- Minimum Wages and Maximum Wages ― Why the Determination of Worker Pay is so Poorly Understood - May 29, 2018
It’s a trend these days for politicians to hold up the policies of other nations as “lessons” for America to follow. “Don’t take my word for it,” they say, “look at the policy working right there in Utopia next door!” On the face of it, it would seem wise to look around and see what other nations have done, and judge whether they could help make America a better place. In a time where information goes around the world at a dizzying pace, this policy-shopping appears especially tempting. Yet these foreign lessons often eliminate reasoned debate and instead introduce folly into American institutions, rather than shed light and bring prosperity.
Lessons from foreign nations should be viewed with skepticism for three reasons.
First, the institutions of a nation are product of the conditions on the ground in the nation that has them. Every culture is unique, whether that’s differences in trust, homogeneity of race and language, values, religious order, family structure, and social expectations. The institutions they adopt reflect that culture. John Adams hinted at this idea when he said: “our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.” Lose the public virtue, in other words, and laissez-faire government has no legs to stand on. According to economists, the cost and benefits existent in society determine the rules society chooses to live by. This is especially true for institutions that are long lived – since they’ve been around for so long we can infer they are “efficient.” This is one reason why exporting democracy and economic liberalism to the former Soviet Union, Iraq, Africa and elsewhere always seems to fail when change comes top down rather than bottom up.
Second, selling the virtue of foreign lessons to America is almost always inconsistent. That is to say: sure, one might like that policy idea but what about all the other ones around it (as if they are not all interrelated)? Consider those advocating the Swedish model for socialized medicine in the US. Even if glowing claims about it are true, why don’t these same advocates then trumpet Sweden’s completely decentralized education system and school choice? Or campaign on abolishing the minimum wage, as Sweden has done? Not to put too fine a point on it but, belying this Sweden-is-a-socialist-utopia mantra, recent evidence suggests Sweden is a more capitalist country than the US! This cherry picking of foreign lessons takes place elsewhere too. In Canada, it seems New Zealand has become the go-to authority on how to run an electoral system, thanks to its mixed-member proportional representation. But isn’t the fact that New Zealand is effectively the most economically free nation in the world also an important, if obvious “lesson” for Canada?
Third, these unprincipled “appeals to authority” either misinform the public on what is being done abroad or bring ignorance of the grounds that made such policy ideas supposedly successful in the first place. No country is a panacea yet rarely are any of the policy tradeoffs ever mentioned, or the full context of these institutions revealed. As Milton Friedman would say: “there is no free lunch.” Treating lessons from foreign nations as a quick recipe to “save the world” is naïve and potentially dangerous. For instance, far from some idealized central planned system, Swedish health care is run using localized funding mechanisms and private delivery to economize on costs. Moreover, the health care system produces lengthy delays to access “free” care (an issue at the center of its latest election cycle) and uses older medical devices and drugs to save money, but can hurt survival rates once patients are diagnosed and treated for illnesses.
On the face of it, looking around the world for policy solutions to social issues is a wise and noble pursuit. Under closer inspection, however, they more often serve as veiled attempts to remake American institutions of life, liberty and the pursuit of happiness into counterfeits that, in the end, undermine the foundations that made America stable and prosperous.