Books: Government Failure By Gordon Tullock Et. Al.

 (Drivebycuriosity) - Politicians, Journalists and others often complain about "Market Failures" and they want that the government fixes it. A group of economists disagrees. They observe that "government cures usually do more harm than good in the long run". 

This school of thoughts is known as "Public Choice". The book "Government Failure: A Prime in Public Choice", published 2002 by the Cato Institute, is an introduction into "Public Choice" (amazon ). 

Public Choice is based on the observation that politicians and bureaucrats behave just like other people and follow their self interest. While corporations strive to maximize their profits, politicians aim to maximize their votes and their power. Likewise bureaucrats seek to expand their influence, reputation & income, for instance by expanding their organizations.  

The book has 3 sections written by different authors, beginning with the late Gordon Tullock, one of the founders of the "Public Choice" group. Tullock published together with James Buchanan "The Calculus of Consent: Logical Foundations of Constitutional Democracy". While Buchanan received the Noble Prize mainly for this book, Tullock was ignored.

Tullock defines "Public Choice" as "a scientific analysis of government behavior and, in particular, the behavior of individuals with respect to government". He criticizes that government ´cures`"are begun too soon, they do to much, and they are continued too long. Once a government cure is introduced, it stays for decades" doing more harm than good, for instance slowing economic growth. 

The Soviet Union, where economic decisions where implemented by politicians & bureaucrats (central planning) went finally bankrupt, similar countries like Cuba, Venezuela & Northern Korea are doing badly.

Tullock claims that voters are aware that their votes have just a marginal influence, because they are part of many million voters. Therefore voters "are likely bad informed and may favor a politician or policies that are directly contrary to their interest".

The author explains the term "Rent Seeking", which describes "activities to obtain special privilege such as seeking monopoly status, quantitative restrictions on imports, protective tariffs". Unfortunately these activities are very costly to the society. For instance the restriction of imports from China (trade war) hike the prices of many goods, reduce selection and support inefficient domestic producers.

Tullock`s insights explain today`s antitrust activities. The FTC law suit against Amazon and the DOJ law suit against Google are supported by:

"1 Competitors of successful firms that want to harm their rivals or appropriate parts of their businesses;

2. Firms disadvantaged by technological change that seek to mitigate market outcomes unfavorable to them;

3. The personal ambitions of government administrators who do not prosper in quiet times, and

4. The class interest of the legal profession (trial lawyers), which is engaged in redistribution through lawsuits aimed agt stifling market processes."

Tullock`s  essay is followed by 2 chapters, written by Arthur Seldon & Gordon I. Brady, who elaborate Tullock`s arguments.

I strongly believe if  "Public Choice" would get more attention, democracies would function better and there would be more economic growth leading to better standards of living for everybody.