Milton Friedman once said of the political system,
“I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing.”
There already exists an institution that ensures people, be they right or wrong, do the right thing. It’s called the market.
Any wish to constrain government, or keep political interests behaving in the interest of the general public, is a wish that government behave more like a market; and that the political class behave more like individuals must behave to succeed in a market. All reform efforts aimed at making the state smaller, less oppressive, more accountable, more efficient in it’s various activities, and less arbitrary are efforts to make it completely unlike itself, and completely like the market.
What I mean by the market is the entire realm of voluntary exchange and coordination. Politics, like all institutions, is a type of market, but not the type I mean. It has two unique feature that no other institution has, it produces a host of things unthinkable under other institutions.
The first unique feature is coercion. The transactions in the political system are not voluntary. This dramatically alters the incentives and signals in all the exchanges. “Customers” tolerate what they hate, because it’s not worth being jailed for. The second unique feature is near universal moral approval. Though the coercion is real and known by all, it is not only accepted, but praised and condoned. No other institution enjoys this kind of unskeptical reception and sanction. Without these two features, there is no state.
It is easy to see why governments produce so much of what we hate, and destroy so much value. Any market entity that attempted to engage in a single activity the way government does would cease to become profitable and receive universal scorn. On the market, people think it immoral and tasteless to say you’ll provide a free soft drink with a sandwich and not make good. That kind of behavior from a corner deli wouldn’t last a week. On the political market, people think little of a politician who promises to stop sending young people to kill others across the globe, but then sends more instead. That kind of behavior might get you another four years.
If we wish for the wrong people to do the right things, we can engage in the monumental task of altering public belief and preferences enough that they are willing to pay the price for resisting the state. We can work to continually alter the incentives faced by politicians on every single issue, fighting back against every incentive built into government. Of course, the state itself resists this by its very nature, and always will.
The real solution is not the state at all, but the market. It’s not changing the state, it’s letting it fade into irrelevancy as markets grow up around it, carrying out all the activities states try so jealously to monopolize. Markets don’t require perfect consumers or producers. They put bad people in the position where they must do good to succeed.
Friedman was right. The easiest way to do it is to force political entrepreneurs out of government, and into the realm where they’ll have to be market entrepreneurs.