"Mises and Bastiat on How Democracy Goes Wrong, Part I [of 2. Part 2 follows below]: It is only to be expected that the general public prefers to blame political insidersrather than itself for bad policies. But economists also... rarely put the man in the street on their list of suspects. Economists are habitually disappointed by what governments do. Dictatorships are the worst offenders, featuring a rogue's gallery of impoverishing policies from farm collectivization to backyard steel mills to expulsions of minority merchant classes. But democracies also frequently pursue policies like protectionism and price controls that every introductory economics textbook concludes are a costly burden upon the general public. How is this possible? How can majoritarian politics durably sustain policies harmful to majority interests? The most popular way to resolve this puzzle is to blame special interests for undermining the democratic process. Protectionism hurts most people, but the minority which benefits lobbies heavily on its behalf. The main problem with this account, however, is that public opinion research not to mention everyday conversation routinely finds that the policies that economists do not like are popular [ith the general public, which is important in a democracy or, for that matter, in any political system]. The plot thickens. Before going back to the drawing board to come up with a new explanation, it is a good idea to at least investigate whether anyone in the history of economics has already grappled with these difficulties. It turns out that two economistsone French, the other Austrianworked out a rather sophisticated account long ago. The first is Frdric Bastiat, writing in the mid-19th century. The second is [the Austrian economics theorist] Ludwig von Mises, who published most of his relevant work a little less than a century later. One striking feature of the Bastiat-Mises view is that politicians are actually tightly constrained by public opinion. On their account, democratic competition keeps elected officials in lin
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"Mises and Bastiat on How Democracy Goes Wrong, Part I [of 2. Part 2 follows below]: It is only to be expected that the general public prefers to blame political insidersrather than itself for bad policies. But economists also... rarely put the man in the street on their list of suspects. Economists are habitually disappointed by what governments do. Dictatorships are the worst offenders, featuring a rogue's gallery of impoverishing policies from farm collectivization to backyard steel mills to expulsions of minority merchant classes. But democracies also frequently pursue policies like protectionism and price controls that every introductory economics textbook concludes are a costly burden upon the general public. How is this possible? How can majoritarian politics durably sustain policies harmful to majority interests? The most popular way to resolve this puzzle is to blame special interests for undermining the democratic process. Protectionism hurts most people, but the minority which benefits lobbies heavily on its behalf. The main problem with this account, however, is that public opinion research not to mention everyday conversation routinely finds that the policies that economists do not like are popular [ith the general public, which is important in a democracy or, for that matter, in any political system]. The plot thickens. Before going back to the drawing board to come up with a new explanation, it is a good idea to at least investigate whether anyone in the history of economics has already grappled with these difficulties. It turns out that two economistsone French, the other Austrianworked out a rather sophisticated account long ago. The first is Frdric Bastiat, writing in the mid-19th century. The second is [the Austrian economics theorist] Ludwig von Mises, who published most of his relevant work a little less than a century later. One striking feature of the Bastiat-Mises view is that politicians are actually tightly constrained by public opinion. On their account, democratic competition keeps elected officials in lin&theme=ont class=sampleQuote>[ Friends / General ] - ID: 36416
"Mises and Bastiat on How Democracy Goes Wrong, Part I [of 2. Part 2 follows below]: It is only to be expected that the general public prefers to blame political insidersrather than itself for bad policies. But economists also... rarely put the man in the street on their list of suspects. Economists are habitually disappointed by what governments do. Dictatorships are the worst offenders, featuring a rogue's gallery of impoverishing policies from farm collectivization to backyard steel mills to expulsions of minority merchant classes. But democracies also frequently pursue policies like protectionism and price controls that every introductory economics textbook concludes are a costly burden upon the general public. How is this possible? How can majoritarian politics durably sustain policies harmful to majority interests? The most popular way to resolve this puzzle is to blame special interests for undermining the democratic process. Protectionism hurts most people, but the minority which benefits lobbies heavily on its behalf. The main problem with this account, however, is that public opinion research not to mention everyday conversation routinely finds that the policies that economists do not like are popular [ith the general public, which is important in a democracy or, for that matter, in any political system]. The plot thickens. Before going back to the drawing board to come up with a new explanation, it is a good idea to at least investigate whether anyone in the history of economics has already grappled with these difficulties. It turns out that two economistsone French, the other Austrianworked out a rather sophisticated account long ago. The first is Frdric Bastiat, writing in the mid-19th century. The second is [the Austrian economics theorist] Ludwig von Mises, who published most of his relevant work a little less than a century later. One striking feature of the Bastiat-Mises view is that politicians are actually tightly constrained by public opinion. On their account, democratic competition keeps elected officials in lin" TARGET="_top">Send as Free eCard