A Vignette About Government Subsidies

     There are a whole lot of people, organizations, and industries fighting for a place at government’s feed-trough. In the main, governments are happy to have them there, for a simple reason:

     That addiction can be used to control the behavior of nominally independent actors and organizations. Charles Murray, in his early book In Pursuit Of Happiness and Good Government, presented a hypothetical example of a process that’s all too real and all too common. In his example, a Generous Outside Agency that’s been sending a “subsidy” to a school uses the subsidy to impose its ideas – in this case, ideas about how to develop better teachers – on that school. As we open the curtains on this scene, the GOA has been subsidizing the school for four years already:

     The GOA set up an advisory office to develop ideas for how they might become better teachers. These ideas were so enchanting to the planners at the GOA that they decided to encourage schools to adopt them.
     So during the fifth year, the GOA began to offer “incentives” to the hundred parents to implement the programs that the GOA had determined to be the Best Way to educate children. And if some of the guidelines were not agreeable to the hundred parents, the parents were of course free to ignore them. The GOA didn’t have any power to force the hundred parents to do things its way. All the GOA would do was . . . withdraw the subsidy—which, by that time, the hundred parents found an intolerable prospect. After all, they could never run a school without financial assistance from the GOA.

     A lot of people are baffled by this. What do you mean, you can’t operate without the subsidy? There’s an insidious dynamic involved. It’s alien to the mind of the typical private citizen. It starts with the availability of “outside” money: that is, outside the funding channels controlled by the operation being funded. In this case, the operation is a school, the usual funding for which comes from parental tuition payments.

     In defiance of all rationality, the administration of the school will swiftly come to regard the subsidy as a permanent budgetary feature, and will orient its spending decisions around the permanence of that money. Hands will reach for the money at once, as much as they can grab. Why not? It’s there to be spent, isn’t it? And so the funds will be spent to the last penny, and those paid from it will figure their future payments on the basis of the funds that included the subsidy. It takes a very short time for the subsidy to become politically irreplaceable.

     Politically irreplaceable. That phrase should be carved in letters ten feet high. It subsumes a wealth of perversity about the operation of “public” institutions. Everyone wants the benefit, such as it is – and often it’s either illusory, or something wholly other than is represented to the public. Nobody wants to pay for it – and if a “generous outside agency” such as the federal government is willing to foot part of the bill, few will be the voices raised in opposition.

     If you can’t imagine how the subjection of ordinary people, Americans much like yourselves, could be achieved in this fashion, read this brief piece and come back after you’ve thought it over.

     [Applause to Dave Blount at Moonbattery for the link.]