Monday, October 16, 2006
The Washington Post has continued its remarkable series on the faults of the federal farm subsidy program. Although the system was touted as helping farmers in times of distress, it practice it provides windfalls to many farmers and large profits to a handful of competition-protected insurance companies. Among the land use implications is the fact that the program encourages farming in areas that are risky and susceptible to floods, droughts, and other hazards, including many stretches of the intensely farmed Great Plains. The taxpayer is the loser.
The distortion is an example of what I’ll call law’s “Rationale Razor”: If a policy CAN be explained by protectionism of a favored group, protectionism likely IS the lawmakers’ motivation for adoption of the policy. The “Rationale Razor” is a variant, of course, of Occam’s razor, which suggests using the simplest explanation to solving any problem. It also relates to the Public Choice theory of politics, which suggests that lawmakers are driven my personal benefit (including political gain), just like other economic actors. While I do not deny that the “public welfare” motivates some policies, the “Rationale Razor” suggest that protectionism should be the presumption.