But I was stumped: this just seemed like competition. Isn’t competition supposed to be good? How could the outcome seem so bad? It turns out that rent-seeking “competition” is a contest for a fixed price, a zero-sum problem that works like a transfer, at best. Competition in markets has no fixed price, and is robustly positive-sum. In politics you try to move money around and take credit for it. In markets you try to create value and make profits.
My experience with grant writing is that you first look to see what the grantor will pay for, not what the organization wants or needs. charlotte coudl end upwith the homeless housing when it doesn’t have a homeless problem but a bridge that needs repair.
The biggest problem with the way that most “rent seeking” is played out in the U.S. is that those trying hardest to do it employ a big myth in the process - the federal treasury is some magic money pit.
In truth there is not even a “national economy”, only a mathematical process that sums all the local economies across the country to create the purely mathematical notion of “national economy”.
All economies are local, at the bottom line, and every dime that every level of government has is simply money that came, in one sense or another from our local homes and businesses.
But the “local” politician, in seeking to get elected or to stay in office, would prefer to try to get away with getting more money for your locality while pretending they can do it without you paying for it. So, they tell you they are not going to raise your taxes, there going to get the money (not your money???) from the state.
But the “state” politician is no better and knows that unless he takes more money out of the local districts he does not have more money to “give back” to them. So, he finds that X % of the state politicians are in the same boat on the same issue.
“Ah” they say to themselves, “this is a national issue”.
So the local and state politicians tell there friends at the federal level that they should bring home some of that magical federal money as a gift to the people back home.
So the federal politician runs for election on the idea that they have gotten that great federal treasury to give up so much of its magical money to their local constituents, while the state and local politician run on the fiction that they “kept your taxes lower” (because of all those “gifts” from the state and federal treasuries).
Most state and federal aid to localities is nothing other than the highest form of three card monty.
In terms of government expenditures, ITS ALWAYS YOUR MONEY, NO MATTER WHERE IT “COMES FROM”. The idea that having the state or the feds do EVERYTHING is either “better”, “cheaper”, more efficient or DOES NOT COME DIRECTLY OUT OF YOUR POCKET, EVERY TIME is a fiction.
An excellent column. I suspect that the most fundamental conflict we have in American politics is between those who understand this (if only in their guts), and those who do not (or are simply evil).