Rent Stimulus

I recently mentioned "rent seeking" as a weakness in the argument for government provision of public goods. The idea (made famous by Anne Krueger and Gordon Tullock, among others) is that productive resources are wasted in attempts by political actors to move monopoly rights or other things of value away from other people and towards them. One classic example was under federal control of airline routes as airlines and their lobbyists spent big bucks to make sure they, and not some other airline, received the so-called "route authority" to fly from Oz to Shangri-la.

The Wall Street Journal's front page article this morning was an amazing and graphical depiction (it should have been rated PG-13 for "too intense for the weak stomached") of the swarm of lobbyists descending on Washington to make sure that their interests are protected, funded, and otherwise promoted in the current economic stimuls bills. My favorite example was on what seems like it should have been one of the most straight-forward parts of the program: road construction. But what I didn't know is that new road construction uses relatively more concrete and relatively less asphalt, while repair of existing roads typically uses more asphalt and less concrete. I will leave it as a homework exercise to guess which industries' lobbyists were working hard to make sure that the legislation imposes the "right" language with regards to new road construction versus old road repairs.

Shouldn't the old, old idea of "Thou shalt not covet ..." come into play someplace in here?

The Opposite of Government

In my daily meandering around the web, I was struck by the following argument by economist Mark Thoma at the blog "Economist's View":

"If the argument that the private sector is more efficient than government always prevailed, we wouldn't have any public goods at all, and that's not an economy I'd want to live in."

I hope I'm not missing some important context for this quote, but as it is stated I don't agree. Non-government, voluntary associations and for-profit firms have provided and are capable of providing many public goods: airports, schools, roads, orphanages, hospitals, medical research, recreation facilities, nature preserves, zoos, museums, and many others. The opposite of "government provision" is not "private goods only;" the opposite of government provision is "voluntary provision."

I accept the reality that in voluntary provision of public goods, free riding is a problem that needs to be addressed. But government provision has its own list of shortcomings: rent seeking, logrolling, and so forth. I'd like to turn the referenced comment around:

One of the problems of the argument that the government is always better at providing public goods is that it takes our attention away from what can be accomplished in the realm of public goods provision by the private and non-profit sectors.

When I lectured in class about a home for unwed mothers provided by women of the Free Methodist Church, one of my students told me that it was just impossible for that to happen today. I don't think there's any economic reason that such extensive private provision couldn't happen today. I do believe that too many people, like my student, have been told that only government can provide public goods, and so they don't even consider the alternatives.

The Public Square, Cont'd

I have mentioned Os Guinness' work on church and culture before, and also recently in my post on the Public Square. Just yesterday, USA Today featured an editorial on the general topic, in the context of the Barack Obama's inauguration. You can find that article here. I don't agree with everything he says, but he has been a powerful and successful commentator on American culture before, and the articleis worth reading.

Unintended Consequences Part 10,000

Like to flex your social justice street creds by giving toys from Ten-Thousand Villages? So, what will happen to their hand-made toy section when the latest feel-good consumer protection Frankenlaw kicks in in just a few weeks? This is the law that requires pre-testing of almost anything (toys, books, clothing, etc.) that is intended to end up in "children's" hands, and it is threatening to torpedo everything from school logo clothing items to the children's section of libraries. But don't worry, the people repsonsible for the law say that volunteering at your favorite charity thrift shop with all of those untested used or hand-made toys and kids' clothing has a low probability of landing you in jail. Don't you feel better? (Thanks to Instapundit for the lead on this article).

Richard John Neuhaus, R.I.P.

After returning from the break, it's sad that the first post I wanted to write is about the death of Richard John Neuhaus. There are tons of memorials to him across the web, and the only think I can add is that reading First Things has been a source of knowledge and inspiration to me for years.

Neuhaus, together with people such as Peter Berger, Os Guinness, Dietrich Bonhoeffer, and my former pastor Brad Hansen, have caused me to consider the many sides of the arguments about ideas such as "the Sacred Canopy" and the "public square." Christians must navigate between the dangers of having their civil government co-opt their religion for Caesar's purposes (hence the famous Barmen Declarartion against the German Christian movement) and a religion so privatized that, if Christianity became a crime, no one in our social circle would know we are guilty.

I tend to be someone that is pulled on both sides of this argument. I don't believe that Christian churches should display national flags, for example. On the other hand, I abhor the court rulings that have led us to drop prayers at the beginning of college graduations. Obviously, I attend a lot of these, and I am much more disturbed by their court mandated secularism than I would ever be by having clergy of different faiths offer prayers for their graduates.

One interesting example of how the proponents of the sacred canopy changed my opinion is in church architecture. I don't think there's any Biblically mandated about church steeples. Several churches I have attended have not had them, and I used to think along the lines of "couldn't the money have been better spent on the poor?" My opinions changed by the simple accident of traveling through an Appalachian town and seeing it's small skyline dominated by the steeples of its numerous churches. I realized suddenly that our religion is not a private, sheltered attribute and that the earlier Christians who had settled this wild valley had created a space which said (whether they were Methodist or Baptist or Presbyterian or Catholic) "God is watching over this public space."

This is a challenge for those like Doug and me who teach in the secularized public square. How do we become a part of the "sacred canopy" while satisfying the job expectations of our employer. I felt pretty good during the past semester when one of my most politically active students came to me after class and said "I still can't figure out who you voted for." I'm not sure about the best path regarding religion, but I believe it would be wrong if none of my students ever could figure out that I was a Christian.

The King James/Linus Version of Events in a Field, At Night, Long Ago

Merry Christmas

Greed can be Everywhere We Go

Templeton Foundation hosted a forum in October/November about whether capitalism corroded individual morality. My response, which you can find in an earlier post “The Chicken or the Egg?,” was that capitalism did not corrode morality but provided an ever-present incentive to engage in corrupt or immoral behavior.

Just as Mark mentioned in the previous post, whatever morality we attribute to a system comes from the people inside the system whether it be economic, political, family, etc. One common critique of the capitalist system is that the prevalence of greed. People act in completely self referential ways that cause them to want to possess, acquire, and destroy. In other words, they act out of the dark love known as eros. That greed happens I do not believe is disputable just read the newspapers. But, I want to submit to you that government is also merely a system that can also attract greed.

One problem economists understand is the moral hazard problem. People act out of their own incentives and not the desire of the people that designed the system. For example, someone takes advantage of disability payments even though they are capable of work –or- an individual remains on medicaid despite their current support from someone they have not yet married. Sometimes economists place too much emphasis on the fact that people do game the system and not enough on those who are legitimately helped. Parenthetically, one interesting question arises, “How much does a government program need to be gamed in order for us to consider other options?”

Finally, people taking advantage of a situation and extracting resources that were not intended for them can occur in the free market and government. CEOs pay themselves exorbitant salaries during unsuccessful years and lower income people sometimes take advantage of resources that they were not supposed to receive. The root of such activity seems to be self-love and greed –which is idolatry.