Knowledge And Decisions

Political decision making tends to be categorical rather than incremental in another sense as well. The programs of government officials or political candidates tend to be expressed in categorical rather than incremental terms. The lifeblood of politics is popular emotion, and categorical declarations capture that emotion. No one is going to man the barricades for a little more of A and a little less of B. Nor are they even likely to ring door bells on cold election nights for such incremental considerations. Therefore political activity — whatever its substantive or ideological content — has built-in incentives for categorical presentation of alternatives. The competition among political groups does not therefore bring to bear more accurate knowledge, as in economic competition, but promotes exaggerated hopes and fears — and sometimes deeds. Nor is this a transient pre-election phenomenon. Once such categorical exaggerations have been set in motion, they become incentives and constraints on subsequent policy making, in even the most totalitarian regimes. The press in a free country is to some extent a constraint on the categorical rhetoric of politics in government, but the selling of newspapers to subscribers and news programs to advertisers also depends on maintaining a certain level of public excitement which is also promoted by categorical clashes. There is little incentive for any institution to promote an incremental approach to political decision making.

The government tends to categorical decision making not only because of the incentives it faces but also because of the incentives it creates for those outside government. By conferring a valuable right on some group at the expense of some other group(s), the government provides an incentive for expensive, internecine struggles to be the group that receives rather than gives. Naked group struggles, openly recognized as such, would provide the basis for incremental adjustments of competing claims. But in order to get more public toleration for private interest, the dispute is verbally or ideologically transformed into a clash of principles — which must then be resolved categorically. All-or-nothing decisions raise the stakes, and the resources devoted to being the winner, and lower the probability of a socially optimal result from this socially disruptive process.

There is clearly some optimal level of change and of the divisiveness that accompanies it. With everyone paralyzed by fear of divisiveness, no change would ever have taken place — politically, economically, or socially — and we would all be still living in the caves. But if every change immediately set off new struggles to change that change, the relative merits of each of the successive states might mean less than the incessant turmoil. Whatever the optimal rate of change for a given political entity as a whole, that optimal rate for a given political practitioner or party is likely to be greater, since he can gain as the ostensible champion of whatever group he selects or creates by his divisiveness.

SUMMARY AND IMPLICATIONS

The government has been conceived of as a framework of rules within which other decision making units can make decisions without the high transactions costs of maintaining private force for the purpose of protecting their physical safety or of protecting their belongings or of maintaining threats to enforce the carrying out of agreed upon contracts. As a framework, the government simply delineates the boundaries within which other units determine substantive choices, the government making its own forces available to defend the established boundaries. But while the government sets the basic framework for others — narrowly or broadly, depending upon the degree of freedom in the country — it is also itself subject to incentives and constraints, institutionally and individually. Government is not simply “society” or “the public interest” personified. Indeed, in modern democratic government — especially in the United States — it is often not a consolidated decision making unit but an overlapping montage of autonomous branches, agencies, and power cliques — each of these responsive to different outside coalitions of interest groups or ideologists.