10 Jul Government is the Engine for Perverse Incentives by Bill Buppert
Manners are the lubricant of civilization and so are incentives. Incentives, whether good or bad, make the world go ‘round.
When drugs are illegal such as the wide variety of illicit hallucinogens proscribed by the rulers in America, they don’t go away. Prices rise in the black market attracting guerrilla entrepreneurs who emulate government in their use of violence to deliver goods and services. After all, the government delivers its goods and service at the point of a gun. Behind the smiling and beneficent face of Uncle Sam is a violent psychopath who will stop at nothing, even your death, to enlist your compliance and obedience. He cannot brook opting out or refusing because most sane human beings would do the cost-benefit analysis and discover that the goods and services offered by the government are shabby, ineffective or just plain bad for their health.
So the state puts the economic and behavioral permutations of incentives on their head. If one is a small firm owner, you go out of your way to develop customer relationships that speak to repeat business and a growing clientele of loyal customers. One tries not to treat family members poorly as an incentive to continue to receive their love and comfort.
Incentives are a means to predict how folks will respond. A positive incentive would be hotel loyalty programs and great customer service. A negative incentive would be the likelihood of a burglar surviving a shopping spree on private property in my old haunts in rural northern Idaho. Not likely.
A perverse incentive is the third way by the state. The perverse incentive tries its best to encourage sub-optimal behavior to benefit the few at the expense of the many. It is a means to subdue and force loyalty albeit, a false loyalty from the lash and the fetters. Innumerable penalties and threats are the lion’s share that leads to the well-trodden path of the statist ladder of obedience – threatening, fining, kidnapping, caging, maiming and killing.
Who in their right mind at the individual level would overspend, always seek a higher credit line, reduced payments and insist that the risks be socialized to their neighbors but all profits be granted to them? No normal human could achieve this yet that is what the state does with their fiscal house.
Who in their right mind would insist that certain naturally occurring substances must not only be banned but penalized in a fashion that would triple the size of Stalin’s political and criminal gulags at the height of Soviet power in the land of the free and the home of the brave?
Who in their right mind would engage in a protracted and bloody military campaign in their neighborhood on ALL their neighbors to wage war to right a slight by a single malicious blackguard in the community?
America would and does.
Throughout history, governments have pioneered the perverse incentive. They blackened the good and stymied progress at every turn. One of my friends claims that the solar system would be colonized by now if the government dysfunctions and pathologies that have enslaved billions and murdered millions had not existed. Hyperbole, to be sure, but illustrative nonetheless.
Imagine a world where the advancement of civilization is embraced and punishment is viewed as not only punitive but barbaric.
Imagine a world without government.