Government structure causes corruption

Posted on February 10, 2010 by Elliot Engstrom, Senior columnist

Governments habitually do many despicable things. Whether it be declarations of war, debasement of currencies or imprisonment of those who have committed no real crimes, these patterns seem to hold fairly steady when just about any government throughout history is critically analyzed.

However, it gets us nowhere to simply say “government is bad” or “I am anti-government.” Instead, we must endeavor to understand why governments habitually act in this manner, in order to, hopefully, alter their structure to be less prone to commit such actions.

We must begin our analysis, like any other, with an intrinsic (or self-evident) proof of what government is, from which we can use inductive reasoning to draw some hopefully meaningful conclusions about the nature of government. And the most intrinsic claim we can make about government is that it is an institution made up of human beings. Thus, to understand government, we must first understand humans, which are the most basic of its constituent parts.
Human beings are creatures whose actions are based in incentives. Ludwig von Mises noted this in his Magnus opus Human Action, in which he explained that human beings act in a way they believe will remove uneasiness or make their current state better (note that the ideas of “uneasiness” and “better” are subjective in the mind of each human).

So, if it is extremely hot outside, I may desire to cool myself. If a popsicle is available, I will attempt to acquire it. If both a popsicle and an ice cream cone are available, I must choose which one I think will better allow me to accomplish my goal of cooling myself. Of course, I have limited means with which to attempt to accomplish this goal, forcing me to appropriate my resources towards those aims which I believe are the most important. This reflects the incentive structure of the situation.

Now, instead of me trying to cool myself on a hot day, imagine a governor trying to rule some particular country or region. What kinds of goals do governors have? Common goals of governors include stability, order, maintenance of approval by those ruled and respect from other governors.

What means do governors have available? The most common means at the disposal of governments are taxation, coercion (i.e. police/military), the threat of coercion and appeals to “duty” and “respect” to one’s rulers or nation.

Now we may be able to better understand why governments do what they do. For example, say that a governor wants to increase “stability” in his region. An average person like you or me would have to try to convince others of their view on how and why stability is to be achieved. But a governor need not waste time on such appeals.

A governor might start with decrees to increase stability that people should obey in order to better serve their country. If this fails, the governor could say that anyone who goes against the decree at hand will be imprisoned. If people continue to prefer what the governor perceives as chaos to stability, then the governor may begin to punish some, which he can do via either coercion or taxation. And, remember, every time the governor takes essentially any action in his region, he must rely on funds raised through taxes to do so.

While this is a very basic model and analysis, the point is to show that governments are made up of human beings exactly like you and me; they simply have different means at their disposal to accomplish their chosen goals.

While some of these goals may be different than those of people not involved in the government, one goal that many people share is the attainment (and retainment) of “happiness.” So, if a person in government were allowed to set their own salary (imagine that) why not set it much higher than its market value? If one’s job and respect depend on the approval of constituent voters, then why not simply act in a way that creates a good public image, regardless of whether or not it is the best or safest thing to do? (This is, in my opinion, exactly the case in regards to the “stimulus plan,” which creates a short-term economic boom, but sets the stage for a long-term economic bust.

Libertarians and other anti-government individuals like me often tend to think of government in terms of an “us vs. them” scenario. We must stop and instead consider that these institutions that we wish to dismantle are not simply “bad,” but are made up of human beings exactly like us. The simple fact is that the incentive structure of the institution of government tends to cause human beings to use destructive means to accomplish their chosen ends, as everyone is almost always convinced that they are doing the “right thing,” whether that “right thing” is putting in new pipes to update the city’s water system or killing six million Jews in order to, in someone’s eyes, make the world a better place. Rarely, if ever, does anyone set out upon an action knowing or believing that they are performing an act with no benefits.

Thus, it becomes our duty to search for a way to alter the incentive structure of government, an issue that I will attempt to tackle next week.

Elliot Engstrom is a senior French major from Matthews, N.C.