re: trip to Washington

I was fortunate to spend this past weekend at a law student conference hosted by the Institute for Justice. IJ is the country's premier libertarian public interest law firm. They represent clients in the areas of economic liberty, private property, school choice, and the First Amendment. You may know them best as the firm that represented clients in landmark cases before the Ohio and United States Supreme Courts. In fact there was much discussion on the recent victory in Ohio. The weekend as a whole was quite inspiring.

The events of this past weekend also had some relevance to my blog. For instance, there was a presentation given George Mason University law professor Todd Zywicki. Professor Zywicki served as the Director of the Office of Policy Planning at the Federal Trade Commission from 2003 to 2004. He is also an expert on public choice theory and I believe he is publishing a book on the subject in the near future.

Public choice theory is used to look into why certain political decisions are made that may or may not be beneficial to the public as a whole. For instance, why were steel tariffs put into place a few years ago, when such duties benefit few but harm many consumers in the form of higher input (steel) prices for those that do not manufacture steel and higher output prices for those that have to purchase machinery made of higher-priced steel?

Understanding the answer means understanding the problem of collective action. It is much easier for the few steel producers that are left in this country to get together as one organization and effectively lobby for tariffs than for dispersed consumers (industrial and otherwise) to voice their opinion to make sure that the tariffs are not enacted. Further, as consumers we will likely not be significantly harmed by the tariffs because the total harm will be spread throughout the country. On the other hand, the benefit of the tariffs to the steel producers is concentrated and immediate; they have much incentive to come together and push for protectionist legislation.

Professor Zywicki did not suggest that there is one sole answer to the problems that public choice examines, except maybe for the politicians to stop handing out the "prizes" of legislative favoritism. Someone did indicate however (I forget if it was Professor Zywicki or a member of the audience) that judges should be aware of the problem and perhaps could do something about it, but the likelihood of this ever happening is très slim.

For me, the most important part of the presentation was that it verified my thoughts behind this blog. We see time and time again how large corporations and those with political access enjoy tax breaks and incentives from state and local governments. Smaller businesses can only dream of such preferential treatment. Public choice theory explains why this is happening. I hope there is a solution somewhere out there.