Apparatus Cost
Dec03
Political Economy

Apparatus Cost

“The art of Economics,” says Henry Hazlitt, “consists in looking not merely at the immediate, but at the longer effects of any act or policy.” This is true not only for the economic effects of policy, but also for the political effects of policy. These longer effects in the political realm we’ll call apparatus effects.

The apparatus effect of a policy, in economic terms, is the decrease in the marginal cost of some undesirable policy following the achievement of some other policy aim. More concretely, if you give someone the power to do good, you’ve also given him the power to do bad. Once you’ve cleared the initial hurdle, going farther is a lot less costly, both fiscally and politically.

This sort of thinking is looked upon rather suspiciously in many circles. “Slippery slope”, it’s often called disparagingly, sometimes even (incorrectly) the Slippery Slope fallacy. If I’m arguing for policy x, you can’t bring up policy y which we both agree is bad, even if doing x makes doing y a lot easier. After all I’m not arguing for y. What a handicap to impose on the skeptic!

Nevertheless, the historical pattern is far too clear to ignore apparatus effects. The social security tax, for instance, was never supposed to go above 1%. It sits now at 12.4%. Once you’ve got the apparatus of collection in place, a doubling here and a few percentage points there are no big deal. It’s a lot easier to move from 1% to 2% (and from 2% to 12%) than it was from 0% to 1%.

E-Verify is another example. Besides the injustice in its premise, the biggest danger is that it dramatically lowers the marginal cost for the government of barring anyone from employment anywhere, thus opening the door to innumerable, even more intrusive labor market interventions. The mechanisms are set up; all it takes is a linking of two databases. Imagine if E-Verify were around in the McCarthy era – how complete would have been the marginalization of dissent!

Innumerable other examples can be made. It remains only to be pointed out that this consideration obliterates the connection between the admission that a problem exists and the assertion that the government can or should do something about it.

Tags

Anarchy, Immigration, Institutions, Intellectual Property, Politics, Regulation, Rule of Law, Henry Hazlitt

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Hi, I'm C. Harwick, an economics PhD candidate in Virginia with an interest in monetary theory, institutional evolution, and folk music.

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