Why Government Always Fails

Government failure is structural and systemic; it is utterly incapable of reform.


Why Government Always Fails

By: George Noga – June 21, 2020

          This post explains why government at all levels invariably fails. Next week, our companion posting shows why business succeeds. Sentient people know government fails at everything it attempts, but they often don’t understand why.

          We provide many reasons infra for government failure, but first we must explain the nature of its failure. The causes of government failure are systemic and structural; they are deeply rooted and incapable of reform. Its most common symptoms, waste, fraud, abuse and corruption are organic and cannot be eliminated; it is futile to try.

         Changing political parties, appointing different bureaucrats, increasing oversight by Congress, forming elite study commissions or hiring more inspectors general will have no effect. Government failure can’t be eliminated, but there is one, and only one, way it can be reduced. That solution is revealed at the end of this post – stay tuned.

Reasons for Government Failure

Opposed to Human Nature: A principal reason for its failure is that government is unalterably opposed to human nature, which is unchanged since we lived in trees. Humans are hardwired to advance their self interest and to respond to incentives. All the incentives in government are misaligned and contrary to the public interest. This also explains why socialism never has worked outside of a family, clan or tribe.

Public Sector Economics: This is more an explanation than a reason. It explains, inter alia, why government prefers borrowing over taxation, why taxes are opaque and why failed government programs continue to exist – and even to expand. Politicians and bureaucrats are responding to incentives, but ones that reward them, not the public. And politicians’ biggest (and likely only) incentive is to get reelected.

Failure to Attract Talented, Motivated People: Risks and rewards of government work do not attract highly talented, motivated and hard-working people. Government work tends to attract those who are risk averse and prefer inertia over action. Why would being a bureaucrat appeal to anyone who is capable of succeeding in business?

Not Market Based: Markets gather knowledge from the bottom up based on consumer choices and preferences; all transactions are non-coercive and benefit both parties. Instead of mutually beneficial relationships created by markets, government is top down, highly coercive, ignores consumer preferences and creates winners and losers.

One Person Can’t Make a Difference: Try to name one bureaucrat who transformed government for the better. You can’t because none exists. There are no bureaucratic equivalents of Steve Jobs or Jeff Bezos and there never can be. Such people would never go into government and if they did, they would soon quit in frustration.

Lowest Common Denominator: Politicians succeed most often when they appeal to our basest instincts, or lowest common denominator – instead of to the better angels of our nature. That explains why they divide people by race, gender, age and income and pursue policies they know are detrimental to those whom they represent.

Too Big to Manage: There is no way 537 politicians can manage a $4 trillion budget. Few of them have the necessary private sector experience; most serve only a few years and they have wildly different ideas about what should be done. Moreover, they are not held accountable for their (mis)management of government spending.

         Government failure, with its embedded waste, fraud, abuse and corruption, has been with us since George Washington’s administration. It never can be eliminated. There is only one way it can be reduced and that is to shrink the overall size and scope of government. That’s one reason our mantra is: more liberty and less government!

Our next post on June 28th explains why business succeeds.
More Liberty Less Government  –  mllg@mllg.us  –  www.mllg.us

The Origin of Government

Economic means must precede political means; production must precede
consumption; how prehistoric economies led to the origin of government.
 By: George Noga – February 21, 2016

    Economic means must precede political means. That axiom by Tom Palmer explains why there are no governments among primitive societies. They have leaders but never a state. Hunter-gatherers and nomads don’t generate enough of an economic surplus to support a permanent predator class. Nonetheless, such societies were victimized by roving bandits (precursors of government) who moved on once they plundered what little was available. There was no reason for them to stay. Also nomads and hunters were not stationary and hence not easy targets for predators.

    Everything changed once people settled permanently and established agriculture. Now they generated a regular economic surplus and were vulnerable because they had to remain in one location. Once again, roving bandits came, pillaged and plundered. However, the bandits were not stupid; they grasped the opportunity. Now there was a reason for them to stay and to plunder permanently. Hence, roving bandits morphed into stationary bandits who, through sheer force, subjugated the people and kept out other roving bandits. They thereby acquired and enforced a monopoly on physical violence within a given territory and, voila, government was created.

    The etiology is clear enough. An economic surplus is an a priori condition for the existence of a state. Government cannot exist without entrepreneurs; they have to build it before government can plunder it. Without those who invest, take risks and build businesses, government could not exist. Even the earliest farmers had to invest (plant seeds, tend crops) and take risks (drought, pestilence) while the now-permanent bandits did nothing constructive and often imposed obstacles to hinder productivity.

    Things are no different today. Permanent bandits, who now sanctimoniously go by titles such as kings, emperors, presidents and prime ministers, plunder through their enforced monopoly on violence. America is little different simply because our rulers govern with the pro forma consent of the governed. They call themselves mayor, governor, congressman or president but they behave like the bandits of yore. They plunder from the rest of us to enrich themselves in many ways – licit and illicit.

    Some like Barack Obama (“You didn’t build that”) and Hillary Clinton (“Businesses don’t create jobs“) have the sheer chutzpah to claim government is the source of economic success. Even barbarians of prehistoric times clad in animal skins would have found that absurd; lacking economic knowledge, they nevertheless understood that plunderers did not help the plundered create their businesses. They also viscerally understood Say’s Law that production must always precede consumption, i.e. there was nothing to be plundered until someone produced something.

    We might even be better off today with the bandits of ancient times. Sometimes they got sated and left us alone. Some grasped that plundering less today caused the economy to grow faster so they could plunder more tomorrow, thus benefiting both plunderers and plunderees. Bandits understood imposing arbitrary rules, regulations and creating uncertainty was counterproductive to the amount of plunder. Our current crop of stationary bandits never gets sated and is less enlightened than its ancient barbarian predecessors who stormed down from the steppes of Central Asia.

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The next post describes America’s first encounter with Islamic terrorism – 230 years ago.
Do you know what it was?

Jury Nullification – Closing Argument to Jury

By: George Noga – October 10, 2014

      Of all I learned writing this blog, nothing is more crucial to achieving more liberty and less government than the issue of jury nullification, i.e. the idea that juries are sovereign and have the absolute right to vote to acquit for any reason. The right to a jury trial was enshrined in the Constitution and Bill of Rights not solely for the defendant, but for the jury. Nullification is not to be used lightly; but following are 10 specific examples where it may apply.

  1. Laws have proliferated such that honest citizens acting in good faith unknowingly violate laws they never knew, or reasonably should have known, existed or that were so vague as to be meaningless;
  2. The accused never intended to commit a crime and did not have a mens rea – or guilty mind – which formerly was a requirement for charging or convicting citizens;
  3. Victimless crimes;
  4. Laws that shouldn’t exist like Wisconsin’s making it a crime for a farmer to provide raw milk to the owner of the cows he boards even though consuming raw milk is perfectly legal;
  5. Crimes for which the probable sentence (or minimum sentence) is out of proportion;
  6. Disagreement with the law or the way it is being applied; laws only seldom or selectively enforced;
  7. Abuse by police or prosecutors and/or charges that are political in nature;
  8. Overzealous enforcement or profiling – one third of all adults have been arrested as have 40% of males before age 23 – 50% for black males under age 23. This is prima facie unreasonable;
  9. Instances where justice is not being served; and
  10. Matters of conscience.
     Although widely sanctioned and practiced in the early years of our republic, today defense attorneys seldom are permitted to raise jury nullification at a trial. It should be permitted throughout our land. Following is the closing argument I would address to a jury if I were the defense attorney in a case that cried out for jury nullification.
Closing Speech to Jury from Defense Attorney
      Ladies and gentlemen of the jury: Under our Constitution and common law you, when sitting as a jury, are sovereign. This means you can vote to acquit and thereby nullify the charges against my client for any reason or even for no reason and not be held to account or even asked to explain. You have absolute power including the right to ignore your juror’s oath and the judge’s instructions. This is a sacred right with a lengthy and honorable provenance.
      In 1670 William Penn was tried in London for the putative crime of preaching Quakerism. The judge wanted him convicted but the jury refused. The judge then jailed the jury for four days without food, water or toilet facilities; they still refused to convict Penn. Ultimately England’s highest court ruled that a juror’s right to reject law and to vote conscience is traceable to the Magna Carta signed nearly exactly 800 years ago in 1215. Our laws are based on and incorporate English common law which, of course, traces back to Magna Carta and even earlier.
       In America, a juror’s right to vote conscience emanates from the Constitution and Bill of Rights. The Constitution provides five separate sources with effective veto power before any law can be used to punish an offender; these are: (1) house of representatives; (2) senate; (3) president; (4) judiciary; and (5) jury. Even Congress passes a law, the president signs it and the courts allow it, the law will not stand if juries such as this one refuse to convict under it.
       The right of juries to nullify was well understood by our founding fathers. President John Adams said: “It is not only the juror’s right, but his duty, to find the verdict according to his own best understanding, judgment and conscience, though in direct opposition to the direction of the court.” President Thomas Jefferson said: “Trial by jury is the only anchor by which a government can be held to the principles of its constitution.” The first chief justice, John Jay, stated: “The jury has the right to determine both the law and the facts.” I could continue for a long time with other similar quotes from great Americans, but I believe you already understand.

      Jury nullification has a long and glorious history in America; let me tell you about just a few of the many instances where valiant juries have voted their conscience.

  • The Salem witch trials in 1692 ended for one reason and one reason only: jury nullification. Beginning in 1693 there were 52 consecutive hung juries and/or acquittals and prosecutors ceased bringing new cases.
  • In the 1760s juries refused to enforce forfeitures under the Navigation Acts. England then restricted jury trials as part of the Intolerable Acts which led directly to the American Revolution.
  • In the 1850s northern juries began acquitting abolitionists under the Fugitive Slave Laws.
  • In the 1890s corporations began losing jury verdicts in cases involving the organization of labor unions and strikes resulting in workers winning the right to organize.
  • Jury nullification played a big role in ending prohibition in the 1930s.
  • During the Vietnam War, juries acquitted protesters when informed of their sovereign power.
  • Juries refused to convict admitted consensual sex among adult gays under sodomy laws.
  • In 2012 an Iowa jury acquitted an “occupy” protester who admittedly violated curfew and trespass laws to remain on the grounds of the statehouse to peacefully protest. Immediately thereafter, 15 others accused under the same laws demanded jury trials.
      Ladies and gentlemen of the jury, this case cries out for you to nullify an unjust law. Use your independent life experience, concept of justice, wisdom and beliefs; do not mindlessly follow the judge, other jurors or a bad law. You can and must hang a jury, by yourself if necessary, if your conscience so dictates; you must resist all pressure from other jurors to compromise. Ignore the cost of a retrial. It is your right and your duty.
“A majority is one person with courage.”
     History shines upon courageous juries. Remember what your valiant ancestors did for peaceable Quakers, accused witches, fugitive slaves, workers’ rights, war protestors and persecuted homosexuals and do your duty as a sovereign jury. By doing so, other juries will follow suit; even one solitary American citizen voting his or her conscience can overturn an unjust law for a nation of 315 million. Finally, always remember that a majority is one person with courage!

MLLG State of the Union Address

By: George Noga – October 1, 2014
      My fellow Americans: I begin with first principles. Governments are instituted among men to protect their rights which include life, liberty, property and the pursuit of happiness. Indeed, this is the only legitimate purpose for government. Experience has shown that legally sanctioned force, i.e. government is necessary to secure our rights including defense against foreign threats, protection from domestic violence and enforcement of contracts. Government therefore is a necessary, albeit evil, force that must be tightly controlled and used only for the carefully circumscribed purposes noted supra and then only to the absolute minimum extent necessary.
      All of human experience demonstrates free people, free trade and free markets result in the greatest prosperity for all. Government is inherently coercive; it is not about logic, reason or persuasion; it is about brute force including the threat of force. In contrast, civil society is always voluntary and cooperative. No company, no matter how big or powerful, can compel you to buy its product or service. A consumer armed with a free choice is the most powerful force on earth.

     The principles identified supra lead to twelve major initiatives I now announce. There is much more to be done; however, this is where we must begin to restore our Constitutional Republic.

  1. The Constitutional Box: We are a government of laws and not men. The identity of those who hold executive, legislative or judicial offices should be of little consequence to citizens provided they act within the confines of the Constitution, i.e. stay inside the Constitutional box. This means shrinking government to its core responsibility of securing our rights and, to a very limited extent, providing infrastructure. Accordingly, we will scale the federal government back to 15% of GDP, a level which empirically is demonstrated to result in the maximum rate of economic growth and hence the maximum well-being for all our citizens.
  2. Free Trade: Wealth and prosperity are created by trade among peoples. Traders take substantial risks and can accrue riches; however, their wealth ultimately depends on improving the lives of their customers. If they fail to make you better off, they do not prosper. Free and unfettered trade is universally good – always and everywhere. For that reason I announce the United States unilaterally will eliminate all tariffs and trade barriers – even if other countries do not reciprocate. We will be better off for that action and those who do not follow will be worse off.
  3. Sound Money: The Federal Reserve will have one mission only: to maintain sound money. This means purchasing power will be maintained, inflation eliminated, and increases in the money supply subject to strict constraints. The Fed will be audited regularly and we will take a hard look at reestablishing a gold standard.
  4. Taxation: As we scale government back to 15% of GDP, taxes can be slashed. I am asking for repeal of the 16th amendment to eliminate the income tax. We also will eliminate the death tax and Social Security/Medicare payroll taxes. These will be replaced by  a consumption tax at the lowest rate possible – likely in a single digit. The 60% of Americans who currently pay no income tax (net of credits) will begin to enjoy the dignity that comes with being a taxpayer. Moreover, they will have a personal stake in controlling spending and holding taxes to the absolute minimum. The crisis of spending, debt and deficits will end instantaneously.
  5. Defense and Foreign Affairs: We will follow the admonition of President John Quincy Adams that “America is a friend of freedom everywhere, but a custodian only of our own.” Simultaneously, we will observe George Washington’s advice  that “The best way to keep the peace is to be prepared for war.” We will strengthen and then consistently maintain the military for the long term at such a high level as to deter any possibly adversary.
  6. War on Drugs: The war on drugs is over. As we learned with prohibition, the drug war is unwinnable and never should have been fought. Henceforth, all drugs will be legal but regulated, taxed and discouraged just as with tobacco. Drug taxes collected will go solely for rehabilitation of those who continue to abuse them. We immediately will realize benefits including: (a) releasing non-violent drug offenders; (b) ending drug related crime; (c) putting drug cartels out of business; (d) reducing police corruption; (e) refocusing our foreign policy; (f) ensuring safety of drugs; and (g) eliminating drug dealers as role models.
  7. Regulation: All regulations will automatically sunset ratably every 10 years. Congress must enact any that need to be replaced. Any regulations promulgated by bureaucrats that have an economic impact of over $25 million must be voted on and approved by Congress before taking effect.
  8. Role of Juries: Henceforth, defendants (and their attorneys) will have the right to explain to juries that juries are sovereign and, as intended by our nation’s founders, have the final say about the legality and enforcement of all laws. The grand jury system will be reformed to stop prosecutorial abuse and to allow citizen grand juries.
  9. War on Poverty: The war on poverty is finished. The percentage of Americans who, by their own reports, lack a healthy level of food, shelter, clothing or medical care is 2%-3%. This cohort is identical to the 2% to 3% of Americans with very low mental acuity, i.e. those who struggle to fill out a simple form. We will therefore refocus our attention and also our solutions to better deal with the real problem. Even though the percentage in poverty is low, it still equates to 7-8 million of our countrymen to whom we pledge a strong safety net.
  10. Entitlements: Obamacare is to be repealed and replaced with free market solutions. Entitlements  will be placed on budget. Social Security gradually and voluntarily will be privatized. In the interim, benefits will be maintained by changing indexing and lengthening eligibility ages. Medicare benefits will be maintained by gradually lengthening eligibility ages and changing to a premium support model; also, medical costs will moderate given real prices.  Medicaid will be block granted to the states to administer as they see fit without interference.
  11. Energy/Climate: The Keystone Pipeline will be built and natural gas exported. We will drill and frack in ANWR, offshore and on federal lands – all ASAP. Our national delusion about manmade global warming  is over. Warming is a solar phenomenon to which man’s contribution is minimal. We will continue to develop alternative fuels for the future while eliminating subsidies for wind, solar and biofuels. The EPA’s mission will be refocused.
  12. Education: School choice is the civil rights issue of our time. We will move with all deliberate speed to universal school vouchers. We will bring education into the 21st century with technology and by furthering alternatives such as online and home schooling and by creating entirely new paradigms.
          Thank you and may God bless the United States of America.

How Government Destroyed the American Dream

By: George Noga – Updated March 1, 2014

    In 1957 my parents paid $10,900 for a new median-price home. Their monthly payment including principal, interest, taxes and insurance was under $100. The house cost 1.5 years of my father’s income and the annual cost of ownership consumed less than 15% of income. We lived quite well without my mother ever working a single day.

     I graduated from high school in 1961 and went on to college. Most high school chums remained in Orlando, began work at entry-level positions, married, had children and bought homes. The wives stayed home as a second income was not necessary to own a home or to raise children. I kept in touch with many erstwhile high school classmates and often visited them in their homes. Following is the story of two such people, Steve and Sandy.  

The True Story of Steve and Sandy

    Steve and Sandy (their real names) were high school sweethearts who married following graduation. Steve was hired in the paint shop of the Martin Company. His starting wage of $2.00/hour soon was  increased to $2.25; including a little overtime, their family income was $5,000 per year. Less than a year after their marriage, they bought a new home; soon thereafter they had a daughter. Sandy did not work and stayed home to care for the baby.

    I visited Steve and Sandy frequently during summers. They bought and furnished a new median-price single family home in Orlando. They were able to accumulate the down payment and to furnish the home in less than one year with both working. Once Sandy became pregnant, she quit work as they were able to afford the cost of home ownership solely on Steve’s income. Their home cost two years of Steve’s income; their monthly house payment including principal, interest, taxes and insurance was under $100. They comfortably managed the cost of home and baby and never contemplated Sandy going back to work as it simply wasn’t necessary.

    Let’s fast forward 50 years to 2012 and to Steve and Sandy’s grandchild, Steve III. After high school Steve III earns at best $12/hour, or $24,000 per year. The median home costs 10 times his income and accumulating even a low 10% down payment would be daunting requiring years of saving. Even at low interest rates, the monthly nut would be $1,500, or $18,000 annually – nearly equal to Steve III’s take home pay. What possibly could account for such a dramatic change in only two generations? The answer in one word: government.

    The American dream is dead, thanks entirely to government that sucks the blood out of its citizens, i.e. the vampire state. For the first time ever, Americans believe the next generation will be worse off. In 1962 single-income families like Steve and Sandy were the norm; it was rare indeed for a married woman, especially one with children, to work outside the home.

  Within one generation (by 1985) two-income families became a majority. Now Steve and Sandy’s son, Steve Jr., was 50% likely to have his wife in the work force. Today, during the generation of Steve III, wives and mothers must work to keep the family afloat. How and why did these changes happen? Why is it necessary today for a family to have two wage earners merely to live as well as their grandparents once lived with only one wage-earner?

“Two-income families are a Faustian bargain; the second income

pays only for more government, i.e. more blood for the vampire.”

     The causes are many but all have a nexus to government. Fiat money and the abolition of the gold standard debased the dollar and devalued thrift and savings. Payroll and income taxes mushroomed and applied to ever more income. Property taxes rose exponentially. Regulation chokes growth and hidden taxes proliferate. Housing costs skyrocketed due to government growth management diktats such as concurrency, greenbelts, zoning, bureaucracy, regulatory delay, infill and anti leap-frogging to name only some of the culprits. The vampire state sucked out ever increasing amounts of blood – but it never is sated.

   We were hoodwinked and seduced; for a brief time ersatz prosperity seemed to follow the transition to two-income households. Yes, we could have a second car (albeit a necessity not a luxury for two wage earners) and an extra TV and a few other accoutrements. By the time people noticed the degradation in their quality of life, it was too late for a volte-face. Two-worker families are a Faustian bargain; the second salary pays only for more blood for the vampire. Families doubled the number of workers and received only fool’s gold in return. Are Steve and Sandy’s grandchildren really better off today than their grandparents?

You Didn’t Build That

Prehistoric Barbarians and Bandits Knew Better

By: George Noga – December 8, 2012

       The very instant I heard Obama’s infamous “You didn’t build that” statement I knew it was not only wrong but bass ackward. Economic literati understand viscerally that economic activity must precede political activity. However, it took Tom Palmer in “The Origins of State and Government” to provide much of the necessary historical and logical underpinnings to juxtapose economic activity (business) and government.

“Economic means must always precede political means. Nomads and hunter-gatherers never have a government.”

      Palmer’s axiom is that the economic means always must precede the political means. That explains why there never are governments among primitive societies; they have leaders but never a state. Hunter-gatherers and nomads don’t generate enough of an economic surplus to support a permanent predator class. Nevertheless, such societies were victimized by roving bandits (precursors of government) who moved on once they plundered what little was available. There was no reason for them to stay once they pillaged all the meager supplies available. Also, the nomads and hunters were not stationary and not easy targets for predators.

      Everything changed once people settled permanently and established agriculture. Now they generated a constant economic surplus and remained vulnerable in one location. Once again, roving bandits came, pillaged and plundered. However, the bandits were not stupid. They quickly understood and grasped the opportunity. Now there was a reason for them to stay inasmuch as the farmers couldn’t migrate and they could pillage permanently. Hence, roving bandits morphed into stationary bandits who, through sheer force (subjugating the people and keeping out other roving bandits), acquired a monopoly on sanctioned physical violence within a given territory and, viola, government was created.

“Once agriculture was established, roving bandits became stationary bandits enforcing a monopoly on physical violence in a given territory and, viola, government was created.”

     The evolution and causation is clear enough. An economic surplus is an a priori condition for the existence of a state. Indeed, government cannot exist without the entrepreneur class; they have to build it before government can plunder it. Without those who invest, take risks and build businesses (despite hindrance by the state), government wouldn’t have any resources and would not exist. Even the earliest farmers had to invest (plant seeds, tend the crops) and take risks (drought, pestilence, etc.) while the now-permanent bandits did nothing productive.

   It is no different today. Permanent bandits, who now sanctimoniously  go by titles such as  kings, emperors, presidents and prime ministers, plunder billions  through their enforced monopoly on violence. It continues in kleptocracies across the globe; witness Putin and the ill-gotten wealth of Chinese leaders on full display during the sordid Bo Xilai affair. Witness most of Latin and South America, the Caribbean, most of Africa, all of Arabia and all the countries ending in stan. Don’t forget the narcostate of Mexico and significant pockets of Southeast Asia.

“Even authentic bandits in ancient times sometimes understood that pillaging less today enabled them to pillage even more tomorrow – thus benefiting both the pillagers and pillagees.”

   Is America really any different just because our rulers may govern with the pro forma consent of the governed? They may call themselves mayor, governor, congressman or president but they continue to behave like bandits. They enrich themselves in many illicit ways including money, perquisites, preferments, legal exemptions and power. They plunder from the rest of us in reliance on a legal monopoly on violence largely to ensure their reelection and thereby continued membership in the predator class.  And now the chief bandit in all the land has the sheer chutzpah to proclaim that government is the font of all economic success – a notion that even the barbarians of yesteryear would have found absurd. Even they, lacking any education, understood that the plunderers did not help the plundered create their businesses.

     We may be better off with authentic bandits of ancient times, like those in the Capital One commercials.  At least sometimes they got sated and left us alone. And some of them even understood that pillaging less today caused the economy to grow faster such that they could pillage even more tomorrow, thus  benefiting both the pillagers and the pillagees. Were it so in America today. Our current crop of bandits never gets sated and is less enlightened than some of their counterparts who swept into the west from the steppes of Central Asia.