We of the human persuasion have a horrible predilection to rely on the “seen,” either discounting or ignoring – or being ignorant of — the “unseen.”
That is, as late and great economics journalist Henry Hazlitt put it, man’s “persistent tendency … to see only the immediate effects of a given [public] policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups.”
“It is the fallacy of overlooking secondary consequences,” Hazlitt said, updating the work of 19th-century French economist Frederic Bastiat.
History is littered with proofs of this theorem. The New Deal extended the Great Depression. The War on Poverty deepened government dependence. “Living wages” reduce the job pool. Government “economic development” is a market depressor.
And, oh, yes, flooding the marketplace with money to “recover” from a pandemic which, in turn, has played no small role in fueling inflation.
Add regional government to the list of “great ideas” whose secondary consequences probably won’t get much scrutiny — until it’s too late.
Every 10 years or so, there seems to be a new wave of proposals to consolidate many local governments into a “more efficient,” single government. And we are hearing those whispers again, especially in these uncertain, post-pandemic economic times. (That is, at least from those who know the pandemic recovery addiction to government “recovery” cash is not sustainable.)
Centralization regularly is billed as way to eliminate duplicative public services, save precious taxpayer dollars and make a respective region more attractive to prospective businesses and industries.
“Fragmentation” is bad, we are told. “It’s a no-brainer,” profess the pols.
That’s the “seen.” And everything consolidation or regionalism or “metropolitanism” is touted as being is possible. It’s just not very likely to shake out the way proponents sell it.
As noted urban researcher Sam Staley wrote nearly three decades ago, regional government likely exacerbates the problems it is intended to solve:
“Although there are legitimate concerns about lack of cooperation among local governments, particularly on large public projects such as road and sewer systems, a more consolidated structure probably would decrease the ability of local governments to provide public goods efficiently and cost-effectively,” he said.
Staley finds that attempts to consolidate governmental authority “imply that public goods and services are handled best by a single comprehensive organization.”
“Experiences with regional attempts to solve local problems have confirmed the worst fears of opponents about the excesses of monopoly government.”
So, what does Staley suggest? The exact opposite of regionalism.
“The solution is more likely to be found in a competitive, decentralized governmental system,” he says. “Instead of undermining the diverse interests that make up metropolitan America, urban policy should free political markets to ensure that the desire of local residents are expressed fully in the policy making process and the private sector is given the widest possible latitude to provide needed goods and services.”
In short, more local governance and privatization. Which, of course, is anathema to many politicians who, in many areas, owe their political livelihoods (if not their hardihood) to those who benefit most from monopoly, centralized government — labor unions.
Simply put, costs associated with the public sector “are likely to soar if a more consolidated local government structure is implemented,” Staley found. “The reasons are fairly straightforward and follow directly from a realistic assessment of the way government actually operates,” versus the way government operatives say it can be run if only given the chance.
“When bureaucrats and politicians are removed from close, day-to-day contact with citizens, the incentive to spend increases and the stimulus to reduce costs decreases,” Staley notes.
The evidence is this stark:
“(C)onsolidated local governments spend more money and tax their citizens at higher levels than do cities that have remained in … regional government structures.”
Thus, “fragmentation” as a pejorative is a red herring.
Base to the debate, Staley says, “is a significant misunderstanding of economic markets and the nature of economic development.”
And, it must be added, as previously noted, an ignorance of history that has led several generations to believe that the New Deal ended the Great Depression, that the War on Poverty actually altered the vicious cycle that keeps poor people poor, that wage floors based on “social justice” instead of worth and productivity are beneficial to all and that government “economic development” develops something other than debt for future generations.
For too many years, and under the guise of “efficiency” and “progress,” most of the public have been shown only what proponents of this and that scheme want to be seen. But it’s the great “unseen” that taps the public purse the deepest and drains it the fastest.
Forcing our public officials to acknowledge and discuss what they do not want us to see — or, perhaps, what even they do not see — is the first step to having an honest discussion about “regionalism.”
And if that discussion truly is honest, those whispers will remain just that and better, more sound public policies will have a chance of winning the day.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (www.alleghenyinstitute.org).
