Thursday, February 17, 2011

Parsing the Budget Battles

Politics is the art of the possible—said Otto von Bismarck.

The tragedy of the commons might be defined by saying: “It is present in every situation where most involved will gain by an action immediately but the collective will lose in the long run. The typical choice is almost always to realize gain now. Which is kind of tragic.”

Politics is the art of the possible, not of the optimal, because in modern politics, characterized by relatively rapid feedback systems, people who hold power only ever hold it by a slender margin. If their art is well-developed, they can therefore realize a small part of what they intend to realize, never a comprehensive program.

As I’ve just noted yesterday, politics is conflict between interests. In the long run an optimal solution would benefit all parties to a conflict, but each of the parties only partially. Whereas the extraction of the possible gain will always be greater for the dominant group. Therefore we’re mostly staging tragedies rather than comedies.

I discovered a concise formulation of this in E.F. Schumacher’s book, A Guide for the Perplexed. It made a strong enough impression on me so that I’ve cited it numerous times on this blog already. Schumacher made the distinction between convergent and divergent problems. In the first there is unanimity in what is to be achieved and how; in the other there is conflict. In divergent cases the problem is never resolved at the level where the participants in it live.

The reason why budget battles cause distress to most of those people whose time horizons are long and whose concern for humanity is extensive—thus includes the largest number—is that it seems as if a sensible and optimal resolution of the problem should be possible. And indeed it is. But it requires what might be called an engineering approach. Appropriate cuts combined with appropriate tax increases. But this cannot be done in a commons where the majority of the people participate in the process, if not directly then by reps.

We all know this perfectly well. In some societies, the Roman, for instance, dictators were appointed when serious change needed to be made. The downside is that those appointed don’t want to leave—and have to be removed by force. Cincinnatus is still remembered and revered—because he was the exception. After his dictatorship, he did the unexpected. He just went back to his farm. Order making—to reverse the tragedies slowly cumulating—happens after revolutions when a strong man makes order. Napoleonic reforms are still yielding genuine benefits in France and, by imitation, all over Europe. We make half-hearted attempts in that direction by appointing commissions, e.g., the National Commission on Fiscal Responsibility and Reform; but we deny them real power to implement.

1 comment:

  1. I like the comparison between Cincinnatus and the Commissions, one with ability to study and power to act, one only with ability to study.

    What I fear is that there is a Fabius Maximus Cunctator whose period of leadership will be followed by Terentius Varro - who rejects outright the slow but sure tactics of Fabius - and a disaster like Cannae will ensue.

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