Tuesday, October 22, 2013

Bureaucratic Priority

Leave it till tomorrow to unpack my case
Honey disconnect the phone
--The Beatles

Connected to the previous post, the only way that a particular socialist program can approach the performance of unhampered markets is by bureaucratic priority. For example, bureaucrats might designate Obamacare as a 'succeed at any cost' program and then proceed to redistribute more and more resources toward its development.

Thus, the healthcare.gov website that has had hundreds of $millions diverted in its direction receives an even greater resource endowment in order to make it functional.

But that resource allocation comes at great opportunity cost. These resources have been taken from private hands that, by definition, had other uses for those resources if their owners were free to allocate them.

If bureaucrats see Obamacare as a top political priority, then they will divert as many resources as it takes to obtain something deemed workable in the eyes of the public.

If so, that is what will be seen.

What won't be as apparent is the damage wrought elsewhere in the name of bureaucratic priority. Other endeavors will be starved of resources that are forced toward Obamacare.

The Soviet Union offers the classic precedent. Soviet bureaucrats identified military programs as top priority, and then proceeded to force more and more resources toward military program development. At the program's apex, central planners were diverting massive quantities of economic resources, perhaps half of the country's annual output, toward military uses.

Yes, the USSR developed a competitive military. The trade-off: millions of Russians lived and died in squalor.


dgeorge12358 said...

"Resource-constrained environment" are fancy Pentagon words that mean there isn't enough money to go around.
  ~General John Vessey, Jr.

dgeorge12358 said...

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
~Henry Hazlitt