An article I had published for the Freeman Online:
Ideas vs. Interests
Imagine a billboard that says, “Kicking chickens creates prosperity.”
The billboard is part of a campaign sponsored by the Partnership for a Chicken-Free America. This group is made up of people who have an extreme dislike for chickens, and they are willing to put vast resources into reducing the well-being of chickens. In fact, they advocate legislation to establish national Kick-A-Chick Day.
Most voters and members of the general public do not share this distaste for chickens as a species. Then again, most people are relatively indifferent when it comes to chicken happiness. With a few exceptions, it is not in an individual’s interest to spend resources on a counter-campaign or to hire lobbyists to oppose the Kick-A-Chick bill; the costs of doing so simply outweigh the benefits.
This is a classic case of concentrated benefits and dispersed costs. The anti-chicken people derive tremendous happiness from harm to chickens, making their campaign a worthwhile expenditure. Yet the general public gains little from preventing chicken kicking and the cost of opposing it is very high.
On the other hand, the public loves prosperity. If they believed that punting hens created wealth, there is little reason to suspect they would not support the policy. A public-awareness campaign would be just the ticket.
Armed with Public Choice theory we can see the sad but likely result. The chicken-free association will exert its influence and get its bill. The public will either support what they believe to be a prosperity-creating policy or ignore it altogether because the cost of fighting is too high. The interests align in such a way that we can expect the anti-bird forces to prevail.
Of course this story is absurd and such a law would never be introduced, let alone pass. What makes it so obviously impossible?
People know there is no causal connection between kicking a chicken and enjoying a higher standard of living. That knowledge makes the campaign laughable. Regardless of how the interests are aligned, if people are educated enough to know that chicken kicking does not equal prosperity such absurd policy will not be proposed, much less enacted.
Yesterday I saw a sign on the side of a bus which I found no less absurd. It read, “Converting buses creates jobs. What are we waiting for?” The ad was sponsored by a “clean air” association, which no doubt comprises members of the natural gas industry and people for whom a reduction in fossil fuel use would bring some great pleasure.
Just like our chicken story, the incentives are aligned so that the benefits of bus-conversion mandates to the members of this small group exceed the cost of their advocacy efforts, while the benefits to individual citizens of stopping the mandates do not exceed the cost of opposition. As far as incentives go, the situation seems pretty dire.
Unlike our chicken story, most people do not know there is no magical or “free” job-creation when government mandates bus conversions. The resources used to convert the buses must be taken from somewhere, and it is as likely as not they there are many other jobs destroyed or never created in the first place when the resources are redirected. Furthermore, most people do not know that there is no causal connection between more jobs and more prosperity or a higher standard of living. In fact, if a government mandate creates jobs, it is likely it does so precisely because it is destroying wealth by moving it from more-productive to less-productive (and more labor intensive) uses.
This is actually good news.
It means things are less hopeless than pure Public Choice theory might suggest. Bad incentives can be overcome by good ideas. In our chicken story it was clear that interests alone were insufficient to enact policy. Knowledge of the policy’s incoherence trumped the incentive structure. With a grasp of basic economics people may find the sign on the bus just as laughable as the idea of Kick-A-Chick Day.
Special interests can do much to destroy liberty given the incentive structure in our political system. Indeed, with an ignorant populace there is little they cannot do. But even the most powerful interests ultimately answer to the ideas held by a majority of citizens. Policy follows the path blazed by belief.
Mises stated this plainly in Human Action: “What determines the course of a nation’s economic policies is always the economic ideas held by public opinion. No government whether democratic or dictatorial can free itself from the sway of the generally accepted ideology.”
That is why FEE has tirelessly educated individuals on economic principles for these many years. That is why we must continue our educational efforts, no matter how frustrating it may sometimes be.
When we succeed, interest groups and their ploys will be shown to be just as ridiculous as the Partnership for a Chicken-Free America.