Needlessly fragile equilibria (or, faith in government)

Continuing from yesterday about where the pathological hatred of government comes from: the thing that economics tries to teach you is that all organizations are fundamentally the same – the state, a gang, a corporation; they’re all more or less effective solutions to the collective-action problem, and their dynamics can all be understood in similar terms. From this perspective, it’s not surprising that governments are corrupt, because the urge to shirk is so hard to resist that any time there’s the slightest breakdown in the equilibrium that holds an institution together, there’ll be shirking, i.e., corruption. Life is hard because many equilibria are fragile; it takes a lot to create relatively stable ones.

“All organizations are fundamentally the same – the state, a gang, a corporation.” What political science teaches you is that can’t possibly be true, because of the beliefs people hold about each of those kinds of institutions, and the expectations that they hold about them. Expectations shape incentives, and expectations are fundamentally psychological, social, relational, and above all malleable. Talk to a politician or PR pro. From this perspective, it may not be surprising that governments are corrupt because the urge to shirk is so hard to resist, but it’s also not surprising that people get bent out of shape when a government is corrupt than when a gang is corrupt or a corporation is corrupt. Because our expectations about those three types of organization are fundamentally different, based on beliefs and experience.

And experience. The remarkable thing about American democracy is how often people actually experience getting a fair shake. This is a tremendous reinforcement of beliefs. But the equilibrium, going back to economics, is a very fragile one. If people think that others are shirking and getting away with it, it really gets their goat.

Here we come to a reason why people dislike the government so much. They think it rewards shirkers, that people are getting away with it. But if beliefs shape expectations shape incentives, then someone please tell me where ordinary folk in this country got the idea that poor folks who need help from the safety net are getting away from something. Why is the default assumption that having a hard time means you’re shirking? It seems like the equilibrium supporting faith in government has been made more fragile than it needs to be by what are almost surely completely false ideas about our fellow citizens. To understand why people hate the government so much, we’d have to understand where those beliefs come from.

Next week, I’ll get into what implications this has for philanthropy, the depersonalized nature of charity in the contemporary world, and the season of giving that’s about to come upon us.

Just two entries next week, Tuesday and Wednesday, before Thanksgiving, then I’m on vacation for a week.

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One Response to “Needlessly fragile equilibria (or, faith in government)”

  1. The Blog Briefly Known as "Democratizing Philanthropy?" » Blog Archive » “Get Off My Lawn” vs. “I Gave at the Office” Says:

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