Ȃȁȁ Partʺʺ: Politics and Philosophydecisionmaking in which prospective costs and benefits escape accurate
confrontation. Ļe result may be too much regulation in some directions
and, in some sense, too little in others. Errors of omission do not cancel
out errors of hyperactivity, though, and a case for restraint remains.
What might the ideal amount of government mean? Even without
being able to say (and without facing the anarchists’ challenge to any gov-
ernment at all), one can still recognize aspects of decisionmaking processes
that tilt the outcome toward too much government. Some utterly famil-
iar facts suggest this conclusion. Admittedly, I may have overlooked some
powerful and even overriding biases working in the opposite direction. As
a contribution to discussion, though, I report the biases I see and challenge
the reader to explain any opposite ones that might override them.ŒŞōœřőŚŠőŐ ŐőŏŕşŕśŚş ōŚŐ ōœœŘśřőŞōŠőŐ ōŏŠŕŢŕŠŕőş
Almost everyone who plays a part in governmental decisionmaking, from
the average citizen on up, has a fragmentary view. No one has, or has rea-
son to seek, a full view of the prospective costs and benefits of a contem-
plated activity. ( Just one kind of relatively specific and obvious example
concerns federal sharing in the costs of many state and local projects, with
the result that the local authorities are deciding on expenditure of what,
from their points of view, are “ten-cent dollars” or “fifty-cent dollars.”)
Nothing in government corresponds to the market process of spontaneous
coordination of decentralized decisions; nothing corresponds to its way of
bringing even remote considerations to the attention of each decentralized
decisionmaker in the form of prices.ȁKnowledge, authority, incentives,
and responsibility are largely fragmented and uncoordinated in the polit-
ical and governmental process. Far-reaching and long-run consequences
of decisions receive skimpy attention.
One aspect of this fragmentation, noted by Samuel Brittan, is that
“the cost of a political decision is borne by people other than the voter. A
customer buying a suit or a washing machine has to bear the cost himself.”
Someone voting for a candidate who makes some attractive promise, how-
ever, usually—and realistically—assumes “that others will bear the cost”
(BrittanȀȈȆȇ, pp.ȀȅȄ–Ȁȅȅ).
ȁObviously, I have in mind HayekȀȈȃȄ.
Of course, externalities, transactions costs, and all that keep the price system from oper-
ating with all imaginable perfection. But what is a fringe “imperfection” of the market
economy is a central characteristic of governmental decisionmaking.