No, Melissa, There Isn't a Santa Claus

by D.W. MacKenzie
Mises Institute
Dec. 26, 2011

Political Scientist and MSNBC contributor Melissa Harris-Perry has called for renewed faith in democracy. According to Harris-Perry, recent events have damaged public confidence in the democratic process.

Our faith has been badly damaged by governors who crush unions, by a Congress that will not govern, by a military that tortures, … by CEOs who slash jobs as profits rise, by a system that seems irreparably broken. But building a country requires investment in one another, hope that we can be better tomorrow than we are today and faith that our failures are not definitive. In these final days before we enter the 2012 election year, it is time to ask, "Do you believe?"

In this article, Harris-Perry makes timely reference to stories about those who question the existence of Santa Claus. In Miracle on Thirty-fourth Street and the famous "Virginia" editorial in The Sun people were exhorted to have faith in Santa Claus. As the character Fred Gaily put it, "Faith is believing when common sense tells you not to." Harris-Perry wants to apply this sentiment to democracy.

Even as we challenge it to be better, fairer and more honest, we still have to believe that democratic governance by the people, through their institutions, can and should exist. Like Santa Claus, democracy requires us to believe that collective faith can be greater than our individual doubts.

I agree that belief in our current system requires faith, but the Gaily quote does need to be rephrased. Dogmatism is believing when science tells you not to. What does science tell us about the system that "seems irreparably broken"? It is true that Congress often seems ineffective in dealing with modern affairs, but this is what we should expect. The contemporary American government intervenes into nearly every aspect of our lives. How can any senator or congressman comprehend all of the interests at stake in all of the matters that the government tries to regulate? We live in an extraordinarily complex society. There are literally millions of businesses in America, and a larger number of households. These organizations deal in countless products and services, each of which is produced in complicated ways. Legislators have staffs to help manage their affairs, but the fact of the matter is that modern economies are complex beyond the comprehension of any staff or committee. Consequently, legislatures that try to manage a modern economy in detail become ineffective talking shops, and must defer to bureaucrats.

Reliance on bureaucrats is a necessary part of government, but hardly desirable. Bureaucrats are supposed to serve the public. Economic science points to agency problems in public bureaucracies. Bureaucrats, as agents of the public, should serve the public. Since neither elected officials nor ordinary citizens have strong incentives, let alone enough time, to monitor bureaucrats, these functionaries have leeway to pursue their own interests, at the expense of the general public. Bureaucrats have poor reputations for public service, and deservedly so. Bureaucrats will have opportunities to misuse their authority. To the extent that bureaucrats want to serve the public, they still face the problem of forming a rational plan for managing commerce. Market prices coordinate private activity, but public bureaucracies lack any feasible method of large-scale coordination. Consequently, government regulation often generates chaotic results.

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