Revealed Preferences in Government Shutdowns

Revealed Preferences in Government Shutdowns

The US federal government, thanks to central banking, has an unlimited power to spend, so it almost never has to sacrifice anything to get what it wants. But there are a few brief moments where some procedural rules force Congress to act as if it had a finite budget. These “government shutdowns” give us a glimpse into how the federal government ranks the importance of its many jobs, and a chance to confirm or invalidate one theory of the state: that “the government is us” and more or less reflects our own preferences.

An article at Vox describes what stopped and what kept operating during the 2018 shutdown. This paragraph is instructive:

Drug Enforcement Administration and Bureau of Alcohol, Tobacco, and Firearms field offices are exempt from shutdowns; many Food and Drug Administration officials working on investigations, however, are not. The TSA is fully exempt, but the Centers for Disease Control and Prevention had to furlough a large fraction of its staff. Civil litigation efforts at the Department of Justice (including antitrust investigations) would cease; the Occupational Safety and Health Administration and the Mine Health and Safety Administration would be, temporarily, all but gutted.

The article lists others, and in the 2013 shutdown, Washington went out of their way, without irony, to barricade monuments.

But look closely at the exemptions. My favorite example is the TSA. By all objective measures, the TSA is at least useless and probably worse than useless. It costs about $8 billion per year to run. Without belaboring the point too much, the whole thing is security theater. It’s a farce, and everyone knows it.

So which would you prefer Uncle Sam do without in an emergency? The people who ostensibly monitor and contain diseases? The people who prosecute and resolve civil court cases? Or the useless orcs at the airport that treat you like a prison inmate for no reason? The question answers itself.

The agencies receiving unconditional support tend to be enforcement arms or payouts to powerful constituencies, regardless of their efficacy or desirability. The military, as well, carries on as usual even though soldiers are temporarily denied their paychecks. The expendable ones tend to be citizen-facing services whose absence will cause the greatest amount of discomfort without damaging the state’s ability to impose its will or pacify possible resistance.

In a Machiavellian way, it does make perfect sense for the state to defend its supremacy at all costs. This isn’t illogical in the slightest. But the shutdowns reveal this to actually be the case, and not the comforting euphemisms we often hear about the government. Murray Rothbard asserts in Anatomy of the State that the government is not synonymous with the people. It is a different thing from society, with its own interests, which can be at odds with the people it governs.

The Runaway Watchman

The Runaway Watchman

An upcoming miniseries by Paramount about the 1993 Waco massacre has kicked up some fresh discussion of the events. If you are unfamiliar with the story, a recent episode of the Scott Horton Show will fill you in. Sadly, Waco is not a totally isolated incident. It is only one of the better-documented cases of federal abuse of power. The facts of the Waco case, involving coverups, destruction of evidence, intimidation, propaganda, and exceptionally disproportionate use of force, show an ATF and FBI completely run amok.

Until Murray Rothbard made the case that the state was an unnecessary evil, classical liberals and other free-marketers held that the ideal governing system was a minimalist, “night watchman” state. Many still do. There is strong evidence in the debates surrounding the United States Constitution that the founders thought they were creating this kind of restrained night watchman.

How did the minimalistic federal machinery designed in the 1780s become the militaristic imperial force that slaughtered an oddball religious sect in 1993 and remains rampant to this day? Thomas Jefferson said that the cost of a free society was eternal vigilance, but can the size and capriciousness of these federal institutions be explained just by a lack of vigilance?

The Rothbardian analysis of the state says that the state differs from everything else in civil society in that it does not have a profit-and-loss feedback system rooted in voluntary exchanges. With the powers to tax and to create money, there is no mechanism for the state’s “customers” to withdraw their consent for anything that it does. Elected politicians eventually get negative feedback by getting voted out of office, but since the beginning of the 20th century the federal government is constituted more and more by a permanent bureaucracy whose budget rarely shrinks and is mostly unaffected by elections. Theory would predict these institutions grow and grow while their interests diverge farther and farther from those of the Americans they ostensibly serve, and that is exactly what we see in grisly federal escapades like Waco.

Without any mechanism in place for legitimate resistance, vigilance doesn’t seem to matter. Americans who were vigilant to the abuses in Waco are merely cursed to watch in horror as similar crimes are repeated ad nauseam. The terror will continue until these agencies are abolished, or replaced by something resembling private security forces.

Property theory proves its usefulness in another field: Computer programming

Property exists, according to Hans-Hermann Hoppe, to avoid conflicts over scarce resources. Property allows human beings to avoid constantly fighting each other over the same plot of land, the same cow, or the same hammer. Someone is the owner, and there’s a protocol for the legitimate transfer of title from one person to the next. A simple rule almost everyone can comprehend orders our behavior to prevent most conflicts before they start. I don’t take Sue’s hammer because it’s hers.

In computer programming, scarce resources are also a potential source of conflict. A program is constantly appropriating portions of memory (called allocation), doing work with the data it stores there, and then telling the system it’s done using that portion (called deallocation). If those steps aren’t taken carefully, different programs, or even parts of the same program, will try to use the same location in memory, creating a lot of problems.

Normally, either the programmer is responsible for anticipating these conflicts and addressing them explicitly, or there is an extra process running alongside the program, called a garbage collector, that performs the “deallocation” job so the programmer doesn’t have to remember to do it. The latter is convenient, but it comes at the price of a slower program.

In the human world these approaches would be akin to either memorizing a script that tells me what to do in all situations, or having a third person monitor me while I act on impulse, constantly updating Sue about the status of her hammer. Property works great for humans because a simple, universal rule takes a lot less energy than trying to monitor or anticipate every possible problem.

The relatively new Rust programming language manages to capitalize on this ancient human innovation. In a sense, it thinks of memory as property. It enforces a policy the creators call ownership. Details are available here. To make a long story short, only one part of your program at a time is allowed to read and write to a particular piece of memory. Title to that data is passed around to the other parts of your program as needed, but your code will not be allowed to run in the first place if one part is instructed to use data without owning it first. To the astonishment of some in the computing world, this prevents a lot of common mistakes without imposing a cost on speed. To an Austrian, it is no surprise that this approach solves a number of hard problems.

The mask is coming off on “tax reform”

It seems to me the current tax reform brouhaha plays right into the Bastiat or Rothbard analysis of the state: It’s a machine of legal plunder, and various interest groups compete to aim the mugger’s gun at their enemies to reward their friends. You can see this in how strenuously and uncharacteristically Democrats object to a tax increase when it happens to shift more of the burden onto certain wealthy constituencies they associate with.