The price of politicians

An excellent post on the blog 'Let A Thousand Nations Bloom' addresses the problem of corruption in politics, and does so better than most explanations I've heard. Here's an excerpt:

Suppose each day, a bill comes before the state legislature which costs $1 to each of the 15 million people in a state, and benefits an industry by $10M. (A transfer with 1/3 loss).

The industry will, of course, be willing to spend up to $10M to get the bill passed, because that’s how much they make. So you will have to spend close to $10M to outbid the industry to bribe the same legislators. If the legislators offer themselves for $9M, the industry can pay the price, and still book a million-dollar profit. Whereas every dollar you spend (except one) comes straight from your pocket.

In other words, it’s like you are bidding with a $1 subsidy while the industry is bidding with a $10,000,000 subsidy. It’s a rigged game that will soon leave you penniless, no matter how wealthy you start.

There's more at the link. Highly recommended reading.

Peter