Political junkets are almost universally derided in just about every democracy on earth. They are seen as elitist, wasteful, and contemptuous to the common man. Whether you’re a conservative, leftist, or libertarian, political junkets are the pinnacle of government waste, and we must do whatever is in our power to reign in the waste. Even though I’m defending junkets, I’m still inclined to argue that political junkets are elitist and contemptuous to the common man, however, I’m less inclined to believe they are wasteful (at least not as wasteful as all government programs).
To set the terms on my little rant here, let me first begin by defining what a “political junket” is. There are no clear definitions on what they are, and it generally seems to be that a “political junket” is a trip that offends the public at large when it appears in a newspaper. I’m adopting the definition for the purpose of my defence to “Political Junkets are entitlements or privileges in public spending for public servants that are above and beyond what the private sector is willing to accommodate”.
My argument is effectively two pronged. The first is to show that these political junkets are a better form of spending than the vast array of government programs, that is to say I want to make it clear that “they’re not so bad”. The second, and possibly more contentious of my two points, is that out of all government spending, the junkets are better for the economy than the vast array of government expenditure. Before we begin though, I should point out, that if you believe (for any reason) that government spending is a tool for benevolence, you probably won’t be swayed on any of these statements.
The two major concerns (there may be others but these are the biggest) whenever we look at an economic transaction between a buyer and a seller regard the quality of a product and the price of a product. To quote henry ford “There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wage possible.”
To the individual, at least, whenever we purchase a good or service, if we are to be rational economic actors, we want to purchase the highest quality of goods possible for the lowest cost possible. People may be familiar with this famous table to illustrate that concept.
|Spending||For Yourself||For Others|
|By You||High Concern for Quality
High Concern for Cost
|High Concern for Cost
Low Concern for Quality
|By Others||High Concern for Quality
Low Concern for Cost
|Low Concern for Quality
Low Concern for Cost
The vast majority of government expenditure is in the 4th (bottom right) quadrant. The nature of government taxation and political incentives with a lack of long term institutional memory means that governments are rarely interested in the quality of the goods or services they produce. Similarly, those same incentive structures also mean the relative cost concern is low. Junkets on the other hand, have a high personal benefit for politicians. In the case of junkets, they sit in the 3rd (bottom left) quadrant. While politicians may not have very high concerns for cost, the fact that they derive a personal benefit from this expenditure means they will have a very high concern for quality.
In terms of waste, barring restrictions on expenditure (such as “preference for local goods and services”), junkets manage to send out at least half the market signals that regular spending would. Compared to the rest of government spending, which sits in the 4th quadrant, junkets are slightly better in engaging with the market.
Politicians are also a smaller subsection of the community. While their price signals (at least the quality component) can contribute to the aggregate drive for high quality (because they are going with the grain with individual spenders), their counterintuitive low cost of concern is cancelled out by the larger individual spender concern for low cost goods. So long as political junkets aren’t restricted by preference, over time junkets should contribute towards market signals for quality preferences, while having their negative effect for poor cost considerations wiped by the aggregate of individual spending.
While people have an understandable animosity towards politicians having private gain on the public purse, opposition to junkets are done on non-economic grounds. From an economic perspective, politician junket spending is probably preferable to your average government program.
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