The Myth of Good Government

One my favorite video clips is when Milton Friedman was interviewed by Phil Donahue in the 70s on the topics of greed and virtue.

In addressing Mr. Donahue’s suggestion that governments ought to “reward virtue” Mr. Friedman rebutted (bold emphasis added)

"And what does reward virtue? You think the communist commissar rewards virtue? ...Do you think American presidents reward virtue? Do they choose their appointees on the basis of the virtue of the people appointed or on the basis of their political clout? Is it really true that political self- interest is nobler somehow than economic self-interest? ...Just tell me where in the world you find these angels who are going to organize society for us?"

The illusion of “rewarding virtue” can be seen in the appointments of US President Obama,

From the Politico, (bold emphasis mine)

More than two years after Obama took office vowing to banish “special interests” from his administration, nearly 200 of his biggest donors have landed plum government jobs and advisory posts, won federal contracts worth millions of dollars for their business interests or attended numerous elite White House meetings and social events, an investigation by iWatch News has found.

These “bundlers” raised at least $50,000 — and sometimes more than $500,000 — in campaign donations for Obama’s campaign. Many of those in the “Class of 2008” are now being asked to bundle contributions for Obama’s reelection, an effort that could cost $1 billion...

More (from the same article; emphasis added)...

The iWatch News investigation found:

Overall, 184 of 556, or about one-third of Obama bundlers or their spouses joined the administration in some role. But the percentages are much higher for the big-dollar bundlers. Nearly 80 percent of those who collected more than $500,000 for Obama took “key administration posts,” as defined by the White House. More than half the 24 ambassador nominees who were bundlers raised $500,000.

The big bundlers had broad access to the White House for meetings with top administration officials and glitzy social events. In all, campaign bundlers and their family members account for more than 3,000 White House meetings and visits. Half of them raised $200,000 or more.

Some Obama bundlers have ties to companies that stand to gain financially from the president’s policy agenda, particularly in clean energy and telecommunications, and some already have done so. Level 3 Communications, for instance, snared $13.8 million in stimulus money.

And it’s not just President Obama, but also past President Bush (from the same article; emphasis added)

Public Citizen found in 2008 that President George W. Bush had appointed about 200 bundlers to administration posts over his eight years in office. That is roughly the same number Obama has appointed in a little more than two years, the iWatch News analysis showed.

Well, that’s in the US which supposedly is a country whose political institutions are far sounder than the most of the world.

Yet in the Philippines, it’s been no different.

From Sunstar.com.ph (emphasis added)

FRIENDS and allies of President Benigno Aquino III occupying government positions are not considered “untouchables” and will not be spared from corrections, the President’s spokesman said.

Presidential spokesperson Edwin Lacierda admitted that President Aquino prefers to appoint people whom he has level of comfort but it does not mean that they are not beyond criticism.

So there you have it.

Milton Friedman was correct to debunk the romanticized idea that governments’ reward the virtuous.

Instead, the main beneficiaries of the division of the spoils via political appointments (or political concessions) have been from political allies and political clients, vested ‘rent seeking’ interest groups, families and friends. And this dynamic applies to any form of government.

Realize that political leaders or bureaucrats are human beings or self-interested agents too, whom are subject to the same fragilities (biases, knowledge limitations, different interpretations based on diverse value preferences, cultural orientation, education and etc.) as everyone else.

The difference is in the incentives that governs them with those of economic agents.

Instead of profits and losses, these entities use institutional coercion or violence to redistribute resources based on political exigencies (e.g. populism) with the ultimate aim of annexation and preservation of power and of social image. Thus, the reliance on so-called ‘comfort zones’ as every society operates on diversified interests which continually competes for scarce resources.

Despite the popular notion, Government or the State will NEVER be about virtue or morality.

So for those who stubbornly insist of having “good governments”, be it known that dreams or illusions can last forever.