Notes on the Atrocities
Like a 100-watt radio station, broadcasting to the dozens...

Thursday, April 15, 2004  

An answer to the Norquista retort

Over at The American Street, where I posted my tax screed (below), eRobin of Fact-esque posed a good question.

The Norquistas comeback would be that all the things you say come from taxes will come more efficiently from the market. It's a hard argument to refute because people have been programmed to hate and fear the government, and of course it's not like there is no basis for either emotion. It's the same problem that unions face today. People have been drilled with union horror stories and now are being led to believe that all the benefits of union organization can come more efficiently from shiny, benevolent corporations. Look at the newest slew of Wal-Mart ads for corroboration. People want to believe in that. For some reason, maybe because gov't is essentially made up of neighbors who are easily knowable, warts and all, people don't trust goverment. Also, I think that we all know, whether we admit it or not, that government, and unions for that matter, require active participation, whereas letting the market magically handle things does not. It's not a realistic idea, but I think it's the one a lot of us are operating under.

She's right, of course, that's exactly what they would argue--but it's again just more of that lying business. (Possibly it's stupidity, but I don't think Norquist can be charged with that.) There are three categories of wrongness in this argument: no they couldn't; no, they wouldn't; and just plain no.

No they couldn't
A key function the government plays is regulatory. We know it's key because we have seen that when it's not performed well (see Russia, ten years ago), things quickly go to hell. Self-regulation by the private sector, where it has been tried at all (see Crisis, California Energy), has been a failure.

No, they wouldn't
Other functions of government--social work, say--have no profit motive. While private nonprofits can help, they don't function under that almighty market logic to which Norquist pays lip service. Other times, when the market is the only way to get things done, they aren't done well. Take the arts. While business doesn't mind ponying up where Jerry Bruckheimer's involved, the are less interested where Jim Jarmusch is. If the US had an interest in preserving the arts and the only method it had was private, we'd see the arts die.

Just plain no
Finally, we know that markets work really well in some areas, and not so well in others. Where productivity can aid the bottom line, businesses do very well indeed. There's an incentive there to function efficiently and offer an enticing product. But in others--take prisons, for example--there's no way to improve on productivity. (It takes as many guards for a private company as the government to watch inmates. See Baumol's Cost Disease for more.) The only way a company can earn more profits is to get more generous contracts from the government (for which, incidentally, we still require taxes). This can end up costing more, and you lose oversight. God forbid if government should ever completely privatize something like prisons. It would get medievel quickly.

No, Virginia--errr, Grover--there isn't a cheap way out. Sometimes pooling money to pay for bulk services is cheaper than opening them up to the market. It's often more reliable and more effective, too. That's what government is. That's why we have it.

posted by Jeff | 1:18 PM |
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