The Tyranny of the Special Interest Group

The strongest influence on a politician is exercised by the lobbying of special interest groups. The goal of a special interest group is to confer substantial benefits to its membership and have the cost of these benefits spread thinly accross the population. The goal of the politician is to secure the block of voters who comprise the special interest group without losing votes from the rest of the population. Both the politician and the members of the special interest group gain from the relationship at the expense of the population. It is a relationship without much of natuaral check or balance. The result is a poorer population.

Both the special interest group and the politician rely on the rational apathy of the population. The key word is rational. I'll use milk farmers as a an example. If the government mandates a 5% increase in the price of milk and the proceeds given to milk farmers, milk farmers gain a 5% increase in their revenue (I am ignoring the fact that some consumers will choose to substitute other products for milk as a result of the price hike). I am out a only small sum as milk comprises a small portion of my expenses. Let's pretend that a 5% increase in the price of milk raises my total expenses by .1% The milk farmer gains substantially more than I have to lose. What is my rational response to a 5% increase in the price of milk? Not much because it doesn't affect me greatly. The politician relies on this.

Rational apathy is at work. I can devote time and resources lobbying the government to remove the mandated hike, but this is irrational. My gain with a successful lobbying effort is small. My time and resources are better spent on other things. Compare this to the milk farmer. His lobbying efforts brought him a 5% increase in revenue. The return from his lobbying effort is substantial. His lobbying effort is rational. The politician acts rationally by conferring benefits to milk farmers. He gains or secures their vote without much risk of losing mine.

The problem is that there are many special interest groups. Each has as its goal confering benefits on its members while spreading the costs thinly accross the population. These costs add up! The members who don't belong to a special interest group (largely T4 income earners who work outside of the public sector) pay dearly for these benefits. We pay through high taxes and higher prices due to tarrifs and subsidies. As an example, read my previous post "It's About The Children" and consider how and who pays these salaries and benefits.

There is only one solution. We who don't belong to a special interest group must group and act like one. Politicians who succumb to the desires of other special interest groups will lose our vote. The Canadian Taxpayers Federation would be a good grouping mechanism.

Right On