Message-ID: <3.0.2.32.19970727100019.00af29e8@aloha.net> Date: Sun, 27 Jul 1997 10:00:19 -1000 From: Jay Hanson <mailto:j@QMAIL.COM> Subject: THE POLITICS OF DEVELOPMENT To: mailto:DEVEL-L@AMERICAN.EDU
"The aim of every political constitution is, or ought to be,
first to obtain for rulers men who possess most wisdom to
discern, and most virtue to pursue, the common good of the
society; and in the next place, to take the most effectual
precautions for keeping them virtuous whilst they continue
to hold their public trust."
-- Federalist # 57, James Madison (1787)
"I see the White House is like a subway -- you have to put
in coins to open the gates."
-- Johnny Chung (1997) [1]
======
THE POLITICS OF DEVELOPMENT
by Jay Hanson, 07/27/97
Systems that select for their own failure are often called
Greshamite systems after the English financier Sir Thomas Gresham
(1519?-1579). His name was given to Gresham’s Law, the economic
principle that "bad money drives out good. " When depreciated,
mutilated, or debased (bad) money circulates concurrently with
money of high value (e.g., silver or gold), the good money
disappears because of hoarding. As more and more people notice
that good money is being hoarded, more and more good money is
hoarded -- runaway positive feedback. Ultimately, the monetary
system fails.
American Democracy can also be seen as a Greshamite system.
To understand why, first consider the theoretical premise of our
political system: a government that is willing to act for the
Common Good. Next, consider two very different candidates for
public office. Ms. Honesty believes in the principle embodied in
our Pledge of Allegiance "... liberty and justice for all." If
Honesty is elected, she will treat everyone fairly and pursue the
Common Good.
Mr. Corruption is a good capitalist who motivated to pursue
his own private gain. He has studied the system carefully and
knows that he can gain political power by rewarding his friends
and punishing his enemies.
Which of these candidates has the advantage? Obviously,
Corruption has the advantage! Here's why:
Mr. Jones is a local developer who has money, employees and
influence. Philosophically, he is an average, self-interested
individual who was trained by television (and to some extent by
his family and formal education) to consume as much as he can. In
fact, Jones can’t even remember ever hearing about public goods.
Will Mr. Jones contribute to Ms. Honesty? No, why should he?
If she wins, Jones will receive justice and fairness from her
anyway (a public good). If she loses, Jones will be punished by
Mr. Corruption for helping her.
Will Mr. Jones contribute to Mr. Corruption? Yes, because
Jones has been promised a change of zoning (a private good) so he
can build his new gated community. Jones writes a check for $2,000
to Mr. Corruption and has a few dozen employees volunteer to help
out on Corruption’s campaign.
American Democracy tends to elect politicians who are
motivated to maximize their own private gain (there are some rare
exceptions). Runaway positive feedback occurs as politicians need
more and more money to run for public office. As this process
continues, more and more politicians are corrupt.
Bad drives out good and Corruption drives out Honesty.
To what end? In the end, we do not even have a political system
(one-person-one-vote), only an economic system (one-dollar-one-vote).
-------------------
"Public goods" are goods and services that can be shared by a
whole group of people. Some examples of public goods are national
defense, police protection, government, and environmental services.
As a rule, government must provide public goods for two reasons:
1. Private investors won't supply public goods because they
can't make a profit on them.
2. Voluntary efforts won't supply public goods because the
voluntary contribution of any one person exceeds the
services received by that person. For example, suppose
the cost of national defense to each taxpayer is worth
the services each taxpayer receives. But if the entire
cost were spread out evenly among only those who will
voluntarily pay, then the individual cost will exceed
the individual services. Thus, only government can
supply a national defense through its taxing powers.
This same principle applies to voluntary efforts at cleaning
roads, parks, and so on. Voluntary efforts will ultimately
fail because those who don't contribute (called "free
riders") can use the services anyway. So there is little
incentive for volunteers to contribute over the long
term. Ultimately, volunteers will "burn out".
[ Civic-minded citizens can even be seen as a form of
"corporate welfare"! Instead of corporations paying
for their social and environmental destruction,
civic-minded volunteers donate their own time and money
to keep their communities together while CEOs give
themselves a million-dollar bonuses! ]
"Private goods" are restricted goods. A couple of examples
of private goods are gated communities and toll roads (only those
who pay can enjoy the services).
America's political system is based on private money:
whoever can raise the most money usually wins. Our private-money
political system naturally exhibits a strong bias towards private
goods -- and private profits. This bias towards private goods leads
to less public infrastructure and more private infrastructure
(e.g., private police, gated communities, etc.). Unfortunately,
this leads to a two-class society: one with private infrastructure
and one with no infrastructure; and ultimately, these will lead
to the disintegration of the state. [2]
. . .
[1] http://live.excite.com/News/970727/07.NEWS-FUNDS.html
[2] http://dieoff.org/page67.htm