Thursday, January 26, 2012

But SURELY You Need A Government to Do THAT!?!?

We all live in a world that stunts our imagination. Before Steve Jobs put out an iPad, few of us imagined how something like that could impact our lives. Now iPads are everywhere, being integrated into both our lives and our businesses in ways Jobs himself could never have imagined.
Similarly, now that the government cares for the poor, few of us can imagine how civil society handled such matters a century ago. Down the memory hole go the vast array of voluntary organizations that handled problems of health, insurance, and unemployment for the poor and did so until they were no longer needed because the government "took care of that." And now we can't conceive of it being done without government. To oppose federal programs for the poor is now assumed tantamount to wishing the poor were dead. [For those interested in this history of voluntarism, see historian David Beito's From Mutual Aid to the Welfare State: Fraternal Societies and Social Services, 1890-1967
And of course a huge regulatory apparatus is needed in the financial center. How could people handle the complexities of finance and assess risk without ratings agencies deemed safe by government regulators, without wise federal overseers to protect them? 
I thought of this on coming upon:
[HT to economist/historian Jeffrey Hummel]
Do not read this to think I believe this one link solves ALL financial problems. Merely that one financial problem is solvable in a way that does not involve the government and that no one conceived of, until someone conceived of it. Further, this post is not meant to recommend this particular solution, merely to point out how people spontaneously offer solutions in the market, oft times, as with Wikipedia, on a voluntary non-profit no-charge basis. Much like the fraternal societies of yore...


  1. Thanks for the post Ted (and thanks to Prof Henderson for the link). I've read the Voluntary Society, and trot it out regularly if I involuntarily think (or someone nearby says), "that couldn't happen without government." A good reminder to pick up Beito's prior book.

  2. The fact that state welfare substituted the 'welfare' provided by fraternities indicates that in the view of most people, the state takes care much better of this than fraternities (else, why would they have been 'replaced'?).

    Just because there might have been historical incidents in which people organized themselves in order to carry out national defence, this is not a good argument for why national defence should not be taken care of by the state.

    1. You're begging the question that this was the view of most people. That's just not supported by evidence. For comparison, there's no evidence that most people (57%) had the view in 2008 that Obama should be president, as they evidenced view whatsoever, being as they did not (or could not) vote. Similarly, it's offensive to assume that the support structure disproportionately operated by and for the disenfranchised was replaced by state welfare at their demand rather than imposed upon them, especially given the myriad restrictions on their ability to exercise the franchise specifically and politically in general.

  3. It was one mentioned that if you gather in an abandoned lot in Utah, Mormons will bring you food. Apparently the vagrants don't like this much and move on.

  4. With all due respect, the idea that the State has taken over function A, previously provided by the market, represents evidence that the market poorly performed function A is naive to the point of being risible, without either economic or historical support. The government now provides lunches for a large portion of American school children. How did the human race ever survive until now if, prior to modern state schooling, we were unable to feed our children?

    Anonymous might find of interest Charlotte Twight's "Dependent on D.C.: The Rise of Federal Control over the Lives of Ordinary Americans."

  5. @ Ted

    It very plausible that an important fraction of government rules arises out of a democratic consensus in favor of these rules. You might not like this, but how else would you explain the fact that the politicians implementing these rules get elected? Are we voters stupid??

  6. Our government is mostly care for the elderly, Medicine and defense. Medicine in the past was voodoo. There was not much to spend on. The elderly did not live as long in such numbers. Very large families were the norm and they were largely agricultural. I would agree that if we go back and live on farms and all have 10 kids that we will need less govt. intervention. As to defense, I am all for cutting back on our overseas bases, but I think it would be hard to do away with a standing military.


  7. It very plausible that an important fraction of government rules arises out of a democratic consensus in favor of these rules.

    It's more plausible that politicians bribe voters with handouts. This is the explicit arrangement that government has with those over the age of 65 and inner city blacks: vote for us and we'll give you a handout.

    Since the government controls the schools, due to its despicable monopoly, it has no problem lying to people, convincing them that the government is actually doing a good job. You believe it. All the problems that are happening in the inner cities weren't much smaller than they were before the government decided it was going to subsidize broken homes, single motherhood, unemployment, and the feelings of entitlement. The disintegration of the black family is a direct result of government intervention, all in the name of "the children".

    Are we voters stupid??

    No, but they are self interested and myopic.

  8. Anon. thinks the presence of legislation is evidence the legislation is desired by the public, arguing that, after all, the public ain't stupid. Ken has a different POV, that while not stupid, voters are self-interested and myopic.

    I have yet a different view of the matter. As economist Bryan Caplan has shown in his excellent book The Myth of the Rational Voter: Why Democracies Choose Bad Policies (see ), voters act irrationally, in the economic sense for good and justifiable reasons. Actions that are individually reasonable turn out to have bad social results. On the matter of whether or not voters act in their own self-interest, the interesting social science literature says, amazingly, they don't. Of course, if one is acting in what one thinks is the public good and one is acting irrationally, that may be the worst of all possible worlds.