Politicians are Entrepreneurs of Externality

Guest post by Michael Philip

[D]emocracy is supposed to make things better, by making all voters part of the political bargaining process. The problem with that is much of the art of representative politics is using the coercive power of the state to provide benefits to folk who do notice (and care and effectively politically express that noticing and caring) while shifting the costs onto those who do not. In other words, generating visible positive externalities paid for via not-usefully-noticed negative externalities. Politicians are entrepreneurs of externality. Appealing to politicians to deal with problems of externalities in general is rather like putting arsonists in charge of the fire brigade.