Wealth, Poverty & Politics
How do I know that better information is likely to cause the end of these special-interest arrangements? After all, they have been in existence a long time and most economists know about them in general even if the public does not. They do not seem to be very secretive. I believe that they depend on either ignorance or misinformation on the part of the public. My reasons for believing so are two: first, if you discuss any of them with average voters it will turn out that they have never heard of them, or if they have heard of them, they are badly misinformed about them. In the case of the British Columbia Egg Board, the average voter probably does not know that there is such an organization. The voter who does probably has bought the argument that the organization stabilizes prices and protects the family farm.
But in addition to this informal public opinion poll, there is another and, in my opinion, more important reason. If we think of the British Columbia Egg Board, any economist could quickly arrange a set of taxes on eggs together with direct subsidies to the people who were in the business of producing eggs that would make both the customers and the producers of the eggs better off. We do not see this direct subsidy being used. Why do pressure groups not simply aim at a low tax on the entire population that is used to pay a direct sum of money to them rather than these clearly non-Pareto-optimal arrangements that we in fact observe? I think the only available explanation for this is that they know that a certain amount of confusion and misdirection is necessary. A direct cash transfer, a tax of $10 per family in British Columbia for the purpose of paying a pension to the 300 people who happen to own egg factories at the time the program was put into effect, would never go through because it is too blatant and obvious. It is necessary that these things be covered by some kind of deception. Granted that I am right about this-that these programs require that the people be misinformed—informing them is likely to terminate the program. No politician is going to tax all of his constituents a small sum of money in order to give a large sum of money to a small group no matter how well organized that small group is if everyone knows that is what he is doing. Economists can see to it that they do know.
Note here, also that the nature of the mass media is on your side. The mass media all aim at large audiences. The small pressure group does not have much chance of getting the attention of the mass media except, possibly, unfavorable attention. The small pressure group very likely has its own journal, which it uses for internal communication, but the owner of a TV station or a newspaper will tend to come down for his customers en masse, not a tiny minority of his customers. Thus, not only is secrecy and deception necessary here but the nature of the mass media means that unmasking of these villains is likely to be popular with those who want to make money in the media business.