One of public choice economists' biggest insights is why, in a representative democracy, concentrated interest groups often gain at the expense of the dispersed consumers or taxpayers. Our favorite examples tend to be the sugar lobby, the farmers' lobby, and the steel industry's lobby. Even though it can be shown that the losses to consumers in higher prices from restricting competition from imports exceed the gains to suppliers in the industry, government officials still often restrict imports.The reason is that the suppliers have a lot at stake per person and, therefore, have a large voice in the political process. Each consumer, though their losses are large in the aggregate, has a relatively small amount at stake. As a result, their collective voices are rarely heard, primarily because they are silent.
This explains why an industry that competes with imports can get protection from foreign competition. But why is the protection not complete? Why are any imports allowed at all? It must be because the costs to consumers and to exporters would then get high enough that many of them would put pressure on the government. In short, what we have is a political equilibrium that comes about because the politicians are trading off the support of the industry against the feeble opposition from consumers and possibly stronger opposition from exporters. They hit their political "sweet spot" with positive tariffs.
But now imagine how high tariffs would be if consumers and exporters could not vote. The equilibrium would change. The new sweet spot, from the politicians' viewpoint, would be higher tariffs or smaller import quotas to restrict imports more than before. We can apply this insight to foreign policy.
Among those who bear large costs of one government's foreign policies are people who live in other countries. So, for example, if country A's government kills people in country B, the potentially biggest losers from this policy are people in country B. But because people in country B cannot typically vote in country A's elections, and cannot typically give campaign contributions to politicians in country A, some of the biggest losers from government A's policy cannot directly influence political outcomes in country A. Thus some of the opposition to the government's foreign policies, though potentially strong, cannot legally be brought to bear on the politicians making the decisions. A clear implication is that the politicians will not care as much as otherwise about damage done to foreigners and that, therefore, the equilibrium could involve a lot of damage. Couple that with the fact that citizens in country A will be even less well informed about many of these actions than they are about the government's actions in their own country, and the implication is even more destruction of country B than otherwise. This is just one implication of the public-choice way of thinking.
This is from David R. Henderson, "The Economics of War and Foreign Policy: What's Missing?" in Defense & Security Analysis, Vol. 23, No. 1, pp. 87-100, March 2007.
Here's the passage that reminded me of what I wrote 10 years ago:
Obama's particular revulsion against a certain kind of global power politics is a product, Rhodes suggests, of his having been raised in Southeast Asia. "Indonesia was a place where your interaction at that time with power was very intimate, right?" Rhodes asks. "Tens or hundreds of thousands of people had just been killed. Power was not some abstract thing," he muses. "When we sit in Washington and debate foreign policy, it's like a Risk game, or it's all about us, or the human beings disappear from the decisions. But he lived in a place where he was surrounded by people who had either perpetrated those acts -- and by the way, may not have felt great about that -- or else knew someone who was a victim. I don't think there's ever been an American president who had an experience like that at a young age of what power is."
This zeroes in on one of the few things I have always sensed in, and liked about, Obama.
By contrast with Obama, the typical U.S. foreign policy person I read seems not to care much at all about victims of U.S. foreign policy in other countries, except when it gives him a talking point to use in a debate. And these foreign policy experts are not, by and large, bad people. They're simply people for whom people in other countries seem like an abstraction rather than real people: thus Rhodes's mention of the game of Risk.
I'll give an instance. At various conferences I've attended over the years, I've run into Larry Korb, a former defense official in Ronald Reagan's administration, and a man who very much judges the world his own way. I have great admiration for Larry. He's a fantastic story teller and I've urge him to write up his stories in a book. He's also a compassionate man. In my view, he's one of the best there is in the U.S. foreign policy establishment. So imagine my surprise when, watching him on a C-SPAN call-in show one morning, I saw him tell the audience that approximately 58,000 people had been killed in the Vietnam war.