Knowledge And Decisions

Governments can and do combine discretionary decision making and dependable rules, but neither can go to its logical extreme without destroying the other, and there are trade-offs at all points in between. Traffic is usually regulated by wholly arbitrary priorities established mechanically by traffic lights at intersections, without any regard to whether the traffic in one direction has more personally or socially justifiable reason to go first. Clearly there will be times when someone who is due at an important meeting (to himself or society) will sit waiting impatiently for the light to change while someone else who is merely out for a joyride proceeds across the intersection. Traffic laws, like all other arbitrary rules, imply such social “inefficiencies” — and imply also a decision that the costs of eliminating the “inefficiencies” too far exceed the benefits to even try. As a safety valve for extreme cases, the traffic laws themselves incorporate exceptions for emergency vehicles whose sirens convey the knowledge that an exception is about to occur. Arbitrary, categorical or “bureaucratic” rules in general cannot be criticized as wrong merely because some individual consequences are sometimes nonsensical as compared to what an intelligent and impartial person would have decided in the light of all the facts of the particular case. Neither the facts, nor intelligence, nor impartiality, are free goods. Categorical rules are a recognition of this and an attempt to economize on the resources available in the light of their costs. The case for incremental or discretionary decision making is a case for accepting the risks of discriminatory, unintelligent, or corrupt decision making. Such a case can be made in specific instances. What is important is to understand the trade-off.

POLITICAL MACHINES

Much of the history of municipal reform politics in the United States is a history of a shifting trade-off between unresponsive, bureaucratic, “good government” and corrupt political machines flexibly attuned to the general priorities and personal urgencies of the citizens. Supporters of reform movements have tended to be upper-class people with the education, experience and influence to penetrate the bureaucratic maze, while corrupt machines stayed in power by adjusting categorical rules to the needs of desparately vulnerable people who could hardly understand the language of official “good government,” much less cope with its complexities. Corrupt political machines play much the same role in politics as middlemen in economics. They were corrupt because the law sanctioned no such role, much less the personal enrichment that went with it.

In democratic countries, political machines are, among many other things, mechanisms for economizing on the cost of knowledge, and especially its effective transmission. Just as the least technically knowledgeable consumers rationally sort by brand name (including franchises), rather than attempt finer sorting by detailed product characteristics which they are not qualified to judge before purchasing, so those less politically knowledgeable vote for or against the political machine according to their perception of its performance, rather than rely on their knowledge of specific candidates and issues. This provides an incentive for political “bosses,” with greater knowledge of individual office holders and specific issues, to monitor both in such a way as to maximize the long run public acceptance of the machine, just as name brand products manufacturers or franchising organizations have an incentive to engage in quality control as surrogates for consumers who lack their special knowledge.

In none of these cases does quality control imply perfect quality, nor is it clear that it would be socially optimal to seek maximum product quality (or even minimum variation in quality) rather than optimum product quality variation in view of costs. Political machines are particularly liable to financial corruption, to varying degrees — especially when representing constituencies to whom such corruption is less shocking than it is to social critics or to classes who would not be attracted to a machine in any case. Quality control is not according to some abstract ideal, but according to those qualities actually valued by the relevant constituency.