No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Fourteen: Decision-making in Democracy: Public Choice 331 So what would we expect to see from bureaucrats that act in their self-interest? Well, we know that the bigger the program, the higher the rank of the government official running it. So we should expect to see government bureaucrats continually pushing for larger programs. Larger programs tend to result in higher pay, more prestige, bigger/ nicer offices, etc. Of course, if you are in charge of that program as the bureaucrat, it would be easy to convince yourself that if only you had more money, what a great job you could do! You don’t push for a bigger program just so you can have a larger office—or do you? In either case, the effect is the same; personal incentives match the bureaucrat’s perception of the public interest. Now that we have an overview of some of the political actors in our drama, let’s look at the world they live in. COMPLEXITY OF COLLECTIVE DECISION-MAKING In the market place, if you want a product, you go to the store and buy it. The seller of the good gets the benefit of your money, and you get the use of the product. Each side of the transaction gets the benefits and the costs of the exchange. You give up money and get a good or service; if the transaction is purely voluntary we know that ex ante (ahead of time) you think the exchange increases your well-being (or utility in Econ-speak!). Likewise, the merchant values the cash more than the good that he/she surrenders in exchange for your money. Both parties in the transaction benefit. Even when there is ISRAEL WANTS A KING! 1 SAMUEL 8:10-18 10 So Samuel spoke all the words of the LORD to the people who had asked of him a king. 11 He said, “This will be the procedure of the king who will reign over you: he will take your sons and place them for himself in his chariots and among his horsemen and they will run before his chariots. 12 He will appoint for himself commanders of thousands and of fifties, and some to do his plowing and to reap his harvest and to make his weapons of war and equipment for his chariots. 13 He will also take your daughters for perfumers and cooks and bakers. 14 He will take the best of your fields and your vineyards and your olive groves and give them to his servants. 15 He will take a tenth of your seed and of your vineyards and give to his officers and to his servants. 16 He will also take your male servants and your female servants and your best young men and your donkeys and use them for his work. 17 He will take a tenth of your flocks, and you yourselves will become his servants. 18 Then you will cry out in that day because of your king whom you have chosen for yourselves, but the LORD will not answer you in that day.” Israel had to be just like everyone else! “Everyone else has a king, why shouldn’t we? A king could lead us, fight our wars, we need a king!” They failed to recognize they already had a King—the Lord Almighty. So God warned them that a king would take their best for his own service, to pay his own servants. This was intended to be a warning, not something that the Israelites would say “that sounds like a fair trade.” God’s warning was if the Israelites trusted in the king as their provider, rather than Him, they would end up crying to him—but He would not answer. Is there a lesson here for us today? Do we expect our leaders to act in their own self-interest as the kings God warned Israel about did? Should our trust be in the welfare state or the Lord?