What is wrong with this country?

A full discussion of this question would take many volumes. Here is a summary of causes, symptoms, and observations jumbled together - the idea is to give a sweeping overview and not a polished presentation. This focuses on the US, but similar things are true of many other developed nations.

• It does a poor job of recognizing and dealing with public good problems. We let politicians profit from selling our public goods to businesses which exploit them without compensating the public. More effective methods such as privatizing goods or using evolved common-law customs which have stood the test of time are ignored. Instead, naive techniques like trying to make people feel guilty are used, which fail because of innate human selfishness.
  
• It attempts to impose its morality on others, or to "protect people from themselves". This is a frequent and abhorrent phenomenon. Laws against obscenity, drugs, prostitution, gambling, and many other consensual crimes are caused by this.
  
• It uses intermittent conditioning. Our justice system is a strange combination of severity and laxness, of absurdly harsh penalties and ridiculous loopholes. This may be caused by the diversity of views among members of the democracy, but the result is a middle that is worse than either extreme. First-time drug offenders often get off with little penalty - unless they have the wrong color skin or are in the wrong place or annoyed the wrong person, in which case the punishment may be draconian. Juveniles can get away with almost anything, serving little time, and having their records expunged, until they hit the arbitrary age of eighteen, when things change drastically. Heinlein has an excellent discussion of the foolishness of these methods in Starship Troopers, where he compares dealing with people to raising a puppy. Some modern support for this is provided by the lessons of Axelrod's prisoners dilemma tournament and the Tit For Tat strategy, which teaches that punishment should be immediate, in proportion to the crime, and then the slate should be wiped clean.
  
• The government is huge, and uses a substantial portion of societal resources. This leads to lots of bad things, like a lack of individual responsibility. When most of your income is taken and spent on safety nets, it becomes natural to step more carelessly. "Its not my fault, I couldn't help it" is the cry of the modern citizen, along with "Why doesn't someone do something about it?".
  
• Democracies result in tyranny of the majority. If 55% of the populace thinks it is correct to steal from the other 45%, some of us think it is still stealing. When the constitution is not strict enough or the courts are unwilling to enforce it, the result is that stricture after stricture that a majority can agree on gets imposed on the population.
  
• It is composed of an ignorant populace. Imagine a project to build a skyscraper in which the the engineering and construction teams are created by voting among the city residents, and important engineering decisions are made by ballot. In a city where most people are not engineers, know little about physics, yet all want the building to somehow serve them the result would be unmitigated disaster. Economics and evolutionary psychology are the basic sciences which explain, respectively, the rational and irrational behavior of people (the units of which society is built), yet most people know very little about either. Arguments about trade deficits which have been the economic equivalent of 2+2=5 for two hundred years are still made unchallenged in the media, and are common in political discussions. I am not suggesting that this ignorance means that an autocracy is the right answer - that we should let the elite decide for the proles. In more general terms, that argument is "Well, most people don't know enough to control everyone's lives, so lets try to carefully pick the ones who do". Rather, I am saying "most people don't know enough to control everyone's lives, and no one can be trusted to do so, so let everyone run their own lives". Our situation is rather like the former - with politicans as the elite.
  
• It ignores the implementation problem. People assume that you if you want to change something, you just make a law and it magically happens. Maybe some people break it, but thats what the cops and prisons are for. In the real world, it doesn't work like that. Every law creates changes, sometimes subtle, to the fabric of incentives that structure our lives. Making drugs illegal doesn't make people stop doing drugs - it puts the drug industry in the hands of criminals. When a kilogram of anything costs $100 somewhere in the world and sells for $10000 somewhere else, you are not going to stop that incredible pressure from moving it without taking extraordinary lengths. For another example, consider the beginning of the first chapter of the book Law's Order, by David D. Friedman, which is a laymans introduction to the economic analysis of law:
  
  "You live in a state where the most severe criminal punishment is life imprisonment. Someone proposes that since armed robbery is a very serious crime, armed robbers should get a life sentence. A constitutional lawyer asks whether that is consistent with the prohibition on cruel and unusual punishment. A legal philosopher asks whether it is just. An economist points out that if the punishments for armed robbery and for armed robbery plus murder are the same, the additional punishment for the murder is zero - and asks whether you really want to make it in the interest of robbers to murder their victims."
  
  Most people do not think in terms of these incentive structures or analyze law in this manner. Thus current laws are a patchwork of miscalculated incentives. The implementation problem isn't pretty. It makes governing much harder to not be able to say "I want people to do / not do this", to have to figure out whether what you want will cost more than it gains. But people are selfish and the law is not magic, which legislators and do-gooders often seem to ignore.
  
• It uses centralized, rigid planning and structures, rather than decentralized, dynamic, organic methods of doing things. Nature and life are full of astounding examples of global coordination through local interaction (multicellular organisms, for example). Explicit global coordination through centralized, heirarchic structtures, though occasionally needed, is used much too often.
  
• More to come later...

Up to Independence FAQ

Last Modified: February, 2001
Patri Friedman / patri@izzy.com