It’s easy to blame the politicians. Ask anyone, and they will tell you that Congress is full of cowardly, venal shysters. If that is true, what makes them that way? They are, presumably, ordinary human beings before they get elected. So what is it about asking their fellow citizens for support that turns them into crooks?
Maybe, as the old saying goes, democracies get the leaders they deserve. Maybe the black-and-white division between The People (honest and patriotic) and The Politicians (shifty and shiftless) needs nuance. Maybe The Politicians are following the incentives laid down for them by The People. Maybe The People ask for unreasonable things, such as more benefits and lower taxes at the same time.
I don’t want to be rude about American voters. So let me instead give the example of my British compatriots. You, dear reader, can decide whether my criticisms also apply to Americans.
The first problem is that voters’ perceptions are often awry. For example, British voters believe that foreign aid accounts for around 18% of government expenditure, when the true figure is less than 1%. They think that members of Parliament’s salaries and expenses are among the five biggest government budgets, when in reality the figure is perhaps 0.001% of state spending.
They assume that businesses, especially businesses that they dislike, such as their electricity suppliers, make profits of 50% or more (real profit margins are in single digits). Incredibly, the median British adult believes that the dysfunctional National Health Service, a wholly state-funded monolith that is not allowed to levy charges, runs a profit margin of 34%.
How do candidates begin to appeal to voters whose understanding is so far removed from reality? How, when our taxes and spending are higher than in the immediate aftermath of World War II, do they engage with people who are convinced that our problems are caused by “neoliberalism”?
The only solution I can see is education. Economics is often counterintuitive, running up against our Stone Age heuristics. For a million years, wealth was more or less fixed. If I got more meat after the hunt, you got less. The idea of creating more value through voluntary exchange and specialization needs to be taught because it does not come naturally.
It can be taught, though, even to children. One economics lesson involves giving children bags of assorted candy and asking them to put a value from 1 to 10 on each item. The value is totted up. Then they are allowed to trade, and a new total is calculated. Hey presto: value has been added, not through exploitation or theft, but through voluntary exchange. Internalizing that lesson acts as an inoculation against bad economics in later life.
What goes for trade goes for other counterintuitive ideas. Understanding, for example, that imports are a benefit, not a cost. Or that jobs are not an end in themselves, but a means to the end of greater prosperity. Or that price-fixing never results in lower prices, at least not for long. Or that you can cut tax rates and, by generating economic activity, end up with more revenue.
All these things need to be explained and, as a rule, they are neither taught in schools nor communicated by the media. So someone has to do it.
In the United States, various private organizations step up, consciously remedying the deficiencies of the public education system. I have been spending a lot of time this year with The Fund for American Studies, whose mission is to explain the often difficult individualist philosophy that built the American republic.
I was so inspired by the success of TFAS that I decided to accept a job running the only British think tank that is engaged in that space, namely the Institute of Economic Affairs, which has been teaching classical liberal economics — or, as Milton Friedman liked to say, “just economics” — since 1955.
DAN HANNAN: BEN SASSE, I WANT YOU TO READ YOUR OBITUARY WHILE YOU CAN
To run it, I am quitting the Conservative Party after 40 years. Those 40 years taught me that we are leaving things until too late: by the time young people arrive on campus, their cultural assumptions are fixed. If they are convinced that the economy is a racket run in the interests of big corporates, everything they read at university will be slotted into that assumption.
To answer my own earlier question, I believe many American voters do have a problem with bad economics, especially when it comes to support for tariffs and tolerance for huge deficits. Your problem, though, is less severe than Britain’s, in no small measure thanks to organizations like TFAS. We Brits badly need to copy them.