The Economics of Power

I'm constantly finding juicy nuggets of information at the Von Mises website. For those who don't know, Von Mises is one of the fathers of what is called classical Austrian economics. These wonderfully coherent thinkers often expanded their expertise into government, given that economics and government go hand in hand - alas, more and more frequently, and much to my and the Austrians' chagrin.



Professor Michael S. Rozeff discusses the nature of power and how, in the hands of a centralized government, it works its inevitable corruption. I'll quote the main points:

"This article explains ways in which power comes to work its evil. One is that a ruler is never as careful with public money as with his own, which is true because the power to tax lowers the sovereign’s cost of making mistakes. The second is Lord Acton’s argument that power corrupts, which is true because power both induces a shift in the morality of the ruler and also lowers the cost of acting corruptly. The third explanation is that even when a powerful ruler tries to do what is good, he fails, because he has limited knowledge of the preferences and values of his subjects and less incentive to discover them than his subjects, even if he could."

Excellently put.

See the full article by Professor Michael S. Rozeff here.