The Economic Realities of Politics

Economists are an interesting breed. Many of them approach every issue as if all matters can be fully explained via economics. And perhaps this would be true if it were possible to consider every macro and micro input, output, and element involved in every issue. It might work if you were omniscient.

In fact, many real life issues involve so many intricate complexities that they may seem to defy logic and/or economic theory. Sometimes it is impossible to determine what elements are significant among the seemingly endless minutia and facets surrounding a matter.

Still, economists offer some very keen insights into our world. For that reason, I enjoy occasionally perusing Café Hayek, a blog run by Don Boudreaux and Russ Roberts, economics professors at George Mason University. Roberts has a pair of recent posts (here and here) where he either directly or indirectly discusses the economics of politics.

Roberts disagrees with the view that politicians are stupid. He asserts that they are quite smart within their arenas. But he suggests that we expect politicians to behave in ways that controvert economic laws. Contesting the view that government should essentially behave like a business, Roberts writes, “Public policy isn't run like a business because there's no gain to the players to run it that way.”

Roberts asks, “[W]hy do we expect politicians to do something other than to try and stay in office?” He explains, “That's what they do. Don't ask politicians to do something they aren't motivated to do.”

I think this is an example of economic oversimplification. In fact, politicians are involved in politics for a variety of reasons. If we reduce all of these reasons to economic values, perhaps remaining in office is a major motivator for many. But that hardly explains the whole ball of wax.

Some politicians love playing the political game. It turns their crank. Elections are only one facet of the whole game. We have a number of people that spend their entire careers serving in public positions. Sometimes they’re elected positions. Sometimes they’re appointed. They rotate through positions, but they are still playing the political game.

Another important consideration is that all of these politicians are themselves citizens. That is, they often have a bona fide interest in political outcomes beyond the game itself.

I suspect that we could sit around for months on end coming up with our politicians’ major and minor motivators. Then we could spend years tinkering around with a statistical model of how these factors affect political outcomes. We might even get a government grant to do this study. In the end, I doubt our understanding of the whole matter would be truly enriched. I think that with some information and a little common sense thinking, most of us could readily figure out the main things that make our politicians tick.

Roberts makes the interesting comment that the nature of politics is to centralize. He writes, “Politicians prefer complex policies that redistribute income to their friends and encourage friends and enemies to lobby for changes in the law, relative to decentralized solutions where it's hard to claim credit for the benefits.” In other words, he is arguing that politics works against principles of federalism. This observation would seem to explain NCLB and Medicare expansion, among many other things.

My charges of oversimplification are probably a bit over the top. Should I really expect an economist to delve into the complexities of political motivators in a blog post that merely points out that political motivators exist?

I think Roberts has hit on an important point. Many frustrations with politicians stem from unrealistic expectations. As I study the history of the founding of our nation, I do not believe that our Founders were misled about the basic nature of politics. Many Founders viewed politics as a problematic but necessary element of good government.

In the end, I think Roberts’ point is valid. Don’t expect politicians to behave in ways in which they are not motivated to behave. We should have some general clue about what motivates our politicians. That would lead to more realistic expectations. We still might be frequently disappointed, but perhaps we would be less frustrated about it.