Bryan Caplan  


The (developed) world's 4th lo... Two popular views that can't b...
"Greed is good."  After a few years in economics, the goodness of greed seems like common sense.  But it's not.  In a randomly selected social environment, greed is brutal.  If you're carrying a bag of gold and meet a well-armed stranger in a remote jungle, you wouldn't say, "As long as he's greedy, I have nothing to worry about."  The knowledge that Nigerian spammers are greedy doesn't incline you to send them your money.  If you were looking for a caretaker for your elderly mother, discovering that a job candidate is "extremely greedy" would be a strong mark against him.  As Marge Gunderson sadly muses at the end of Fargo, "So that was Mrs. Lundegaard on the floor in there. And I guess that was your accomplice in the wood chipper. And those three people in Brainerd. And for what? For a little bit of money. There's more to life than a little money, you know. Don't you know that?"

What economics teaches is not that greed is good, but that good incentives transform this questionable motive into awesome results.  Greed plus property rights plus competition plus rationality plus reputation is good.  Greed alone is film noir.

In Public Choice, also known as "economics of politics," we usually assume that politicians are motivated not by greed, but by power-hunger.  Of course, we rarely utter the word "power-hunger."  Instead, we call it "vote maximization," just as we call greed "profit maximization."  But when Public Choice pictures politicians, it pictures humans filled with lust for power.

Is this a reasonable picture of politicians' psyches?  Absolutely.  That politicians crave power is as undeniable as that businesspeople crave profits.  If you look at political history before the rise of democracy, we see virtually nothing other than dictators struggling to cement their power internally and expand their power externally.  When these dictators lost wars, they lost territory and subjects, because virtually every dictators wanted to rule over as much land and as many people as possible. 

Under democracy, politicians are less candid about their motives; they need us to like them, and power-hunger is not likeable.  But given its ubiquity throughout most of political history, can we really believe that the motive of power-hunger is no longer paramount?  One of my favorite political insiders privately calls politicians of both parties "psychopaths" - and he's on to something.  Rising high on the pyramid of power is hard unless love of power fuels your ascent.

In a randomly-selected social environment, power-hunger - like greed - is brutal.  Just look at the history of warfare in all its hideousness - the endless bloodbaths over slivers of territory.  Remember how leaders terrorized their rivals, their potential rivals, their imagined rivals.  It's sickening.  If Fargo were a war story, and Marge Gunderson hunted war criminals, she might have sadly mused, "So that was Sarajevo on the floor in there. And I guess those were your accomplices in the mass grave. And those three hundred thousand people in Bosnia. And for what? For a little bit of power. There's more to life than a little power, you know. Don't you know that?"

In dictatorships, the causal chain from power-hunger to bad results is obvious.  The fundamental question of Public Choice is: Does democracy motivate power-hungry politicians to do good despite their bad intentions?  My admirable nemesis, Donald Wittman, tirelessly argues Yes, but to no avail.  Democracy out-performs dictatorship, but that's damning with faint praise. 

Once you thank the stars you aren't ruled by Louis XIV or Lenin, a grim truth remains: democracy gives power-hungry politicians far worse incentives than the market gives greedy businesspeople.  Above all, voters - unlike consumers - have no incentive to be rational, spurring power-hungry politicians to preach and practice endless demagoguery.  It's gotten worse lately, but it's always been terrible.  Democracy hasn't turned politicians into decent human beings; it's only gilded their age-old power lust with altruistic hypocrisy.

So what can we do about our predicament?  There are no easy answers, but I know where to start.  Like alcoholics, we must admit we have a problem.  Throughout history and around the world, the wicked rule.  We should stop admiring them - especially the politicians on "our side" - and see them for the reprobates they are.

COMMENTS (21 to date)
Maniel writes:

I infer that 1) it would be nice to elect Libertarians to public office and 2) since, by definition, they lack power hunger, this will happen rarely and only by accident.

Hazel Meade writes:

Great post.

I wonder if we can devise some alternative mechanism that turns politicians power hungry instincts towards the good, the way the market forces business people to serve consumers in order to fulfill their greedy instincts.

Beyond that I wonder if what we want is even a mechanism that serves majority rule or one that tends toward minimalist government. Is the problem that politicians aren't doing the voters bidding, or is the problem that all politics is based on force, and therefore is corrupt from the start? And if all politics is force, then isn't it intrinsically impossible to turn power against itself? Is it even theoretically possible to have a system in which politicians are pushed towards limiting their own power?

Joseph K writes:

I tend to think that the only thing that really checks the power-hunger of politicians is checks and balances, that is, putting different parts of government in conflict with each other. It doesn't really transform power-hunger into something pro-social, but it at least defangs the power-hunger.

In fact, I think the relative success of democracy is because it really is just another form of checks and balance: politicians have to compete with one another for voter approval and have to worry about voter approval working against them. That's why it's more important for a country not that it has elections but rather that voters are not easily controlled by political leaders (if political leaders can buy votes or manipulate voters, then voting provides no check).

Thaomas writes:

No news, but no dissent. What I take from this is just as we can expect markets to yield perfect efficiency with an acceptable distribution of consumption, neither can we expect first best legislation -- taxes will not be lump sum, or exclusively Pigovian. Expenditures on public goods will not always pass NPV tests. Regulation will not always perfectly and costlessly correct market failures. Redistribution of income will be inefficient on both the taxing and distribution ends. Consequently, the best we can expect is second best policy, which means judging policies with quantitative estimates of their effects. Pointing out that policy X is not first best adds no new information.

ColoComment writes:

No one has described the problem better than Madison in Federalist #15:

"But the great security against a gradual concentration of the several powers in the same department, consists in giving to those who administer each department the necessary constitutional means and personal motives to resist encroachments of the others. The provision for defense must in this, as in all other cases, be made commensurate to the danger of attack. Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place. It may be a reflection on human nature, that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions."

James writes:


Market processes and political processes both fall short of theoretically perfect outcomes but your comment makes it seem like the gap is comparable in both cases. Did you mean to suggest that? It seems implausible.

If a business offers to sell you a product or service that you don't want or consider harmful, you have the option not to buy it. Politicians can force you to buy what they are selling whether you want it or not, even if you know it will make you worse off. It would be remarkable if this difference didn't translate to a difference the quality of outcomes.

You are right that pointing out a policy isn't first best adds no information to those who already know this. When I witness the enthusiasm people have for politicians, I suspect they don't realize this. If people were aware of this, I suspect they would withdraw some of their support for politicians.

Harald K writes:

The lower the barriers are to participation, and the more you distribute power, the more we will be ruled by the merely slightly power hungry (maybe even those only as power hungry as ourselves - any less than that, though, is a pipe dream!).

Some people will want power a lot, some will want it only a little. But if those people have only the same few non-costly levers to pull to get it, the former's hunger will give him no benefits.

The best and most obvious is to make that lever a good old one-armed bandit. Distribute power randomly. Then the power-hungry have virtually zero advantage.

john hare writes:

@ Harald
I fear decisions by random strangers even more than I fear decisions by the power hungry that at least have to have some idea of their talking points. The person that runs a company or even a unit of it averages far more competent than the average employee even if there are some exceptional employees.

Or if you want it bluntly, random people on the street are not to be trusted with serious decisions as they average quite ignorant. I include myself in this as I am aware of my ignorance of the details of many fields.

Harald K writes:

John Hare, you almost call out the paradox of your statement better than I can myself :)

You are ignorant, you say? But that isn't necessarily a problem, if you know it. Then you can call in the necessary competence. Identifying that isn't always easy, of course, and a self-professed and selfish "expert" might still fool you. But you're probably going to do a better job of discriminating between supposed experts if it's your only job, than the vote of 1000 people who don't have time to listen and investigate.

There are two problems to "ruling", the political part and the nonpolitical part. The political part is about what we want, which interests are to be served. The nonpolitical part is about how to best serve them.

I think that the former is far more important than the latter. I'd tolerate a great deal of inefficiency in government if I could rest safe in the knowledge that it still served me. An efficient government is no use if it's only efficient at serving itself.

Alexa K writes:

Thank you for this writing. On the whole, I would prefer to agree with you. However, I have not found U.S. consumers to be any more rational than U.S. voters. If one looks at the bulk of what is consumed/purchased in the U.S., it is hard to see that purchases such has highly processed and nutrient poor food products, petroleum based products, high quantities of pharmaceuticals with negative side effects, etc., promote longer term health and mental well-being. If the argument is purely about whether the consumer is discerning enough to pay a lower price point for a higher volume of stuff, then perhaps. But the voter is just as capable of voting for the lowest common-denominator candidate for a higher volume of rhetoric.

Steve Bacharach writes:

Is it possible that there are some politicians who are in the job because they really want to make the world a better place, and acquisition of power is not their primary motive? Some people just want to serve on the local school board or park and rec district board. Maybe I missed something, but it seemed like Bryan didn't consider this possibility (or I'm hopelessly naive).

Adam writes:

LOL on U.S. We had a Constitutional Republic before

(a) 17th Amendment, (b) Woodrow introduced Federal segregation and (c) Supreme Court decisions such as Marbury v. Madison, WCHC v. Parrish and Wickard v. Filburn.

Too bad. Libertarianism is cumbaya fantasy. Libertarian individuals are quickly trounced by theft, bullies, collusion and gangs.

Aristotle had his facts right: Democracy is proximate to Tyranny.

Matthias Görgens writes:

Perhaps we should put more emphasis on voting with your feet? People have excellent incentives to do that kind of voting rationally.

And that might be part of why eg Singapore and Hong Kong work well: the politicians there are if anything less exposed to normal democratic votes than in 'normal' western countries. But because those two (quasi) city states are so small and open, the feet-voting has paramount influence.

My last point of voting with your feet points to more local federalism as part of an answer.

Of course, there's also plenty of scope to improve standard democratic elections: first past the post is basically the worst system you can think of. Range voting ( removes lots of the incentives for bad politics like extreme pandering to a small base. And then there are also the proportional systems.

(Futarchy is another interesting concept.)

Hazel Meade writes:

Is it possible that there are some politicians who are in the job because they really want to make the world a better place, and acquisition of power is not their primary motive?

What is the difference, really?
Making the world a better place, presumably means having power over other people to cajole them into conformity with the "better" world one envisions, does it not? Whatever one's motives for seeking power, power is still power.

Steve Bacharach writes:

@Hazel Meade
I think your definition of power over other people is so broad as to refer to almost any interaction between two people.
I change lanes on the freeway, and someone notices I'm now in front of them. I caused them to notice me, so I have power over them.
I say hello to a person on the street. They have to respond or not respond, but they have to do something, and I am forcing that reaction.
I buy Girl Scout cookies. A young girl accepts my money and gives me cookies. I forced her into that (or forced her to refuse me).

These are all ridiculous scenarios as regarding relationships of power, yet I'm cajoling people to do something - but not because I want power over them.

john hare writes:

I don't believe the government you mention would serve me even as well as one run by the power hungry. I base that on the decisions I see on an almost daily basis by random people.

The #1 problem I see with your random selection is that it guarantees some percentage of the truly evil will be in a position to ruin lives and countries. Is there at least one of your co-workers that would screw things up so badly that it would take tremendous effort for an extended time to fix? Bearing in mind that the next random pick may not have a clue as to a reasonable fix.

That I have a problem with the way things are does not indicate that I am qualified to straighten them out.

Thaomas writes:

I do not understand how to disentangle "power hunger" from a "hunger" to be able to put in practice a strong set of ideological preferences.

James writes:

Power hunger is the desire to put into place policies which transfer decision making authority from citizens to the policy maker. Understand now?

Shane writes:


"The #1 problem I see with your random selection is that it guarantees some percentage of the truly evil will be in a position to ruin lives and countries."

3 things:
1. Our current situation is that there are arguably more, as a proportion, truly evil people in government than in the general population.

2. If the territories are rightly sized (at most metropolitan areas), then the damage that can be done by evil is contained, and "voting with your feet" can limit it even further. Imagine if you were randomly selected mayor of your town, and those who thought you were evil went to the next town? This also shows that it is better to have the random picks for executives and judges over separated territories, and not legislatures writing laws on a single subject matter for the whole continent.

3. It may be even better to randomly select enough successors for a position that everyone knew who would be and not be in position for the next 40 years or so. Then those successors can have time to learn their constituents' needs and plan before taking office, instead of deciding to run for office, spending 2 years campaigning, and then, after (maybe) being elected, spend a few months putting together a staff and/or cabinet.

Hazel Meade writes:


Being a politician who passes legislation isn't like passing someone on the street. Politicians don't make suggestions, they pass laws. Laws which are ultimately backed by force. It's not like passing someone on the street where they have a choice about whether to say hello or not.

I mean if a politician refrained from passing any legislation and simply confined himself to buying girl scout cookies in order to make the world a better place, that wouldn't be a problem. But that's not why anyone seeks office. they seek office so they can pass laws. That's the kind of "power" I'm referring to. Anyone can have "market power". Anyone can vote with their wallet. Anyone can pass out leaflets on a street corner. But only politicians can pass laws. If you're seeking political power, you aren't looking to buy girl scout cookies.


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