Il Ridistributore: Machiavelli for Parliamentarians in Welfare Democracies
by Gerard Radnitzky exerpted and translated by Wolfgang Kasper
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German social philosopher Gerard Radnitzky condensed the insights of public-choice economics by formulating a number of pieces of advice to politicians in present-day democracies along the lines of MachiavelliÕs Il Principe (ÔThe PrinceÕ) in an article entitled ÔIl RidistributoreÕ .

Radnitzky suggests that the welfare state destroys freedom and the democratic order in countries such as Australia which is driven by people Ôwhose livelihood depends on being electedÕ. If one applies the institutions of the democratic game to social policy and assumes that individuals, interest groups, politicians and the electorate behave rationally, one can formulate a list of rules of rational political conduct:

Ô1.Compete above all for the undecided median voter, i.e. ÔredistributeÕ to them although they are not in need.

2.Redistribute in favour of well organised voters, because these can lend you electoral support or become dangerous to you through strikes, blockades or even the threat of violence ø and you can count on a publicity multiplier through the tax-subsidised media. The preferable mode of redistribution depends on what interests are involved: discriminatory taxes or transfers, provision of public goods or administrative interventions. Public service groups for example, have a primary interest in government assuming as much of a producer function as possible and in providing for as many citizens as possible by broad-based largesse. (Redistribution to help the truly indigent is not in their interest).

3.Redistribute also within the majority on which you and your party count for support, and do so to ensure that transfers are handed out to small groups of marginal voters and that the costs are spread amongst as many citizens as possible because ordinary citizens are Ôrationally ignorantÕ (it does not pay them to incur the information costs to find out what the many political games are really on about).

4.Make the redistribution system ø which is the essence of the welfare state ø as untransparent as possible. In practice, this means that one has to intervene in many technically complex and untransparent ways, so that the citizen-taxpayers can marshall neither the time nor the resources to keep themselves informed about the plethora of interventions.

5.Time your redistributional hand-outs so that they occur shortly before elections and then target them. If the expenditure is made shortly before an election, there is a good chance that the financing problem will be devolved onto the next legislature. This explains the electoral cycles of social policy. They can be observed although democratic governments are in reality open to continual extortion.

Over the long run, such a consistent (ab-)use of social policy will of course impoverish the economy. Public choice theory explains that this outcome is not the fault of ill intentions of politicians, interest groups or the electorate. It is the logical consequence of the incentive structures of the institutional system that contemporary democracies have given themselves. The institutions of the modern welfare state ensure that all those concerned behave exactly as one would expect normal people to behave.Õ

About the Authors

Professor Wolfgang Kasper was, until recently, Professor of Economics at the School of Economics and Management, University College, University of New South Wales.

Professor Gerard Radnitzky is Professor Emeritus of the Philosophy of Science at the University of Trier, Germany.

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