Re: Government intervention

[Doug Henwood <dhenwood@xxxxxxxxx>]

Critiques of rent-seeking are of course very fashionable these days. I'm
struck by the fact, however, that in countries with highly
professionalized civil services - Japan, Germany, France, and even
Britain come to mind - governments often do behave in fairly honorable
competent fashions. In a country like the U.S., which pays civil servants
badly and treats them like shit, their performance leaves more to be
desired. Interestingly, the agencies the U.S. elite does care about - the
Foreign Service, the SEC, the Federal Reserve - do seem to perform
considerably better than those it despises (e.g., the welfare dept.).

Perhaps rent-seeking needs a context.

Doug

Doug Henwood [dhenwood@xxxxxxxxx]
Left Business Observer
212-874-4020 (voice)
212-874-3137 (fax)


On Sat, 29 Oct 1994, Herbert Gintis wrote:

> Eric Nilsson writes:
> >
> >A question which I don't have an answer to:
> >
> >Do those heterodox economist who have models that indicate laissez-faire
> >policies are suboptimal -- and who argue for government guidance of the
> >economy -- what explicit or implicit theory of the State do they have?  How
> >would they counter the argument that, though they are right that capitalism
> >needs a good amount of help to performed well (or fairly), no government can
> >be trusted to follow these policies due to the information/rent seeking
> >problems the mainstream invokes?
> >
> 	Well, history shows that sometimes governments do what their
> 'spozed to do. But more pertinently, I think 'heterodox' people should
> be severe critics of the way governments perform, and propose forms of
> state accountability. I am doing a paper on that, which I expect to
> write in mid-December. Epstein and I argue in our forthcoming book on
> macro policy that those who would like more government intervention
> should be the ones working hardest to develop new forms of state
> accountability. In the U.S. the first issue is I believe campaign
> finance reform. The second is developing better incentives for
> lawmakers and administrators to perform well.
>
> 	To give an example, however, I wrote an article on school
> choice this summer (forthcoming in Teachers' College Record),
> suggesting that under the proper conditions competitive delivery of
> educational services should be a superior alternative to public
> schools. In general, we should fight bitterly against government
> waste, and even government production (unless the government is forced
> to compete with private producers).
>
> 	I think the theory of rent-seeking and directly unproductive
> activity is one of the most important contributions to political
> economy in recent years, by the way, and we should vigorously take up
> the theme.
>
> Herb gintis@xxxxxxxxxxxxxxx
>
>