Good Entropy

Armed and Dangerous » Blog Archive » Marginal Devolution

Eric S. Raymond writes:

We’ve spent the last seventy years increasing the hidden overhead and
downside risks associated with hiring a worker — which meant the
minimum revenue-per-employee threshold below which hiring doesn’t make
sense has crept up and up and up, gradually. This effect was partly
masked by credit and asset bubbles, but those have now popped.
Increasingly it’s not just the classic hard-core unemployables
(alcoholics, criminal deviants, crazies) that can’t pull enough weight
to justify a paycheck; it’s the marginal ones, the mediocre, and the
mildly dysfunctional.

In the comment section:

Jessica Boxer Says:

I propose Boxer’s law of economics: “The economy interprets taxation and regulation as damage and routes around it.”

Marginal Revolution: Is there a case for a VAT?

from the comments:

It seems to me that the American political system is simply broken. Canada could reduce the size of government and keep health care spending in check because in a parliamentary system with strong party loyalty, individual politicans are given ‘cover’ by their parties and are not held personally responsible for the taxes and benefits of their constituents. If the party in power makes a decision to cut benefits which will harm an individual politician’s district, that politician isn’t necessarily on the hook for it. The voters know that he has to vote the party line even if he disagrees with the legislation. He gets re-elected so long as the public feels his party in general is better than the opposition.

In the U.S. system, where every vote is a free vote, each member of Congress has to answer for his/her votes, and this drives NIMBY-ism and ever-increasing benefits without the tax hikes to pay for them, and it also causes wheeling and dealing which ultimately makes large regulatory packages like health care reform incoherent and bloated with pork.

I think American government works well when it’s strictly limited. When Americans try to implement Euro-style social democracy, they fail due to the nature of American government. It is uniquely unsuited to centralized technocratic governance.

Posted by: Dan H. at Feb 17, 2010 12:27:10 PM

EconLog – Sage

Talking about Thomas Sowell’s new book Intellectuals and Society

For example, it is far easier to concentrate power than to concentrate knowledge. That is why so much social engineering backfires and why so many despots have led their countries into disasters.

Brilliant.