This is How Government Works

by

Thomas Lifson at the American Thinker Blog reports on the inspector general’s finding in Chicago’s weatherization program.

For those of you who are too young to understand, or too naive to “get it”, this is the way government works.

Politicians promise something wonderful that everyone (but particularly those who would most likely vote for them) support. Let’s suppose the thing they promise is “Educating our children”.

They bring out ideas to provide the thing they want to promise. Government can only do three things:

  1. Tax.
  2. Spend.
  3. Regulate.

So they tax, spend, and regulate to get what they want.

So far, so good.

The next step is where corruption enters in.

See, with all that tax-in and spend-in and regulation-in, the politicians decide to carve out exceptions or benefits for their friends and themselves. They are, in effect, picking winners. They give them beneficial tax codes, a little extra spending, or regulation that makes their lives a little easier than their competitors.

And their friends, now flush with cash, give a few dollars back to their political benefactors, who repeat the cycle from the beginning.

Notice that missing is any form of feedback loop. In real life, if you set out to do something, you first understand how to measure success, and then you carefully minimize your resource expenditure to achieve maximum results. If you want to build a bridge between points A and B, you define the parameters for success and then you spend as little money as possible to get the bridge you need, so that you have more money for other things.

Of course, in real life, we don’t have the power to tax and to regulate. And our power to spend is limited to how much money we can command either through our personal assets, the assets of investors, or the money we can borrow. Government has a virtually unlimited spending budget because they know that the taxpayers (that’s everyone else, even the poor) will simply make up the difference with interest payments and future principal payments.

When you hear someone say something odd like, “I love education, so let’s get the government out of the education business”, your gut reaction is “What? But the government is helping to do so much good there!” In reality, the tax-in, spend-in, and regulation-in the government does nothing to help, and plenty to hurt.

Let’s look at education.

I would think that having more teachers and smaller classroom sizes would be ideal. In order to do this, we have to either come up with a bunch of money to hire more teachers, or we hire teachers that cost less. Guess which way government goes, every time? With today’s technology, we should be able to increase the benefit of a single teacher without increasing the workload. In fact, I can foresee a day when a handful of talented teachers can educate a million children, provided they were given access to the appropriate technology.

Parents are often mentioned as a critical component in the child’s education, and any sane education program would include them into the equation, respecting their time and resources. Of course, parents are not one to be swayed by government policies. They have a nasty habit of doing whatever is best for their kids, no matter what the politicians want them to do. A government-run education program puts parents in the back of the bus. They can come forward if they’ll behave like good government bureaucrats, but otherwise they need to keep their mouths shut and ideas to themselves. A private education system puts parents in charge of the entire program, even giving them power in critical decisions like curriculum and hiring.

Our state constitution makes some bold promises, promises which it does not keep, when it comes to education. It reads, “It is the paramount duty of the state to make ample provision for the education of all children residing within its borders…” You’d think that with such a bold promise our schools would be made out of gold and teachers would fly around with jetpacks between classes. But the problem isn’t our constitution. It is the system. It is the simply fact that government can only tax, spend, and regulate, and those three programs are wholly insufficient to provide any kind of service, let alone education, and too prone to fraud to trust anyone with the powers over it.

It’s noteworthy that the very things the state constitution does not guarantee–shelter, food, and clothing—are the very things that we have massive surpluses of. We complain because our poor eat too much food. If we used the same system we use to provide education, our children would have education pouring out their ears, and so much education that we would complain because there was too much of it. That system is the same system that has created wealth since the beginning of time, indeed the only system that can create anything: free market economics.

It works like this. People can only persuade each other to do things, since force is out of the question. Because of this, only when two people can arrive at a mutually beneficial agreement do they transact a trade with each other. The net benefit of both people is the wealth that is created—from freedom alone.

In education, it would work like this. Parents would hire teachers, buy books, rent classroom space, and otherwise secure the education they want for their kids through the free market, which means they buy, sell, and barter to get what they want. This will naturally drive the price of education down, and the quality up. Even if no charitable organizations were created to secure these same blessings for those who could not afford it, the price of education would fall so low that for pennies on the dollars, no, pennies on the Benjamins, the poor would be able to get what their children needed. Even the scraps that fall off the table in the day-to-day bustle of the free market would be more than they are getting now.

People are scared of this idea. What if the price doesn’t fall, and what if quality doesn’t go up? Indeed, if you measure education in the way you’d prefer it would be, you’ll likely find that the one thing you think is most important is not as important as you think. Arugula is not a cheap vegetable. But it is not necessary, either.

But to address the concern, look at every commodity over the history of time. Whenever that commodity has been traded in free markets without government interference (except to limit force and fraud), the price has fallen, and supply has risen. Even non-tangible goods and services, say the skills of a designer or programmer, have done the same.

We need to understand, and remember, that government can only provide the things it promises by force: taxation, spending, and regulation. Also, that government, in providing the things it promise, merely creates corruption. Finally, that if you want the price to fall and quality to improve, you simply need to put the free market to work by getting government out of the picture.

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