Government in perspective: What is the “other”?

When people look at government they often see a group of people that they feel are responsible for taking care of the country. Looking deeper, some people see a representation of society that is supposed to do what is in the social interest. Looking again we might see an organisation who is dominated by interest groups and competes with other institutions for resources in the national economy.

All these views of government are true. This does not make them evil or virtuous, they are merely a central component of the current social structure.

Now no matter what view you have of government, there is one thing you are likely to believe – that government should do what is in your countries best interest. However, is this right?

When the government chooses to fiddle with trade policy or immigration policy it does so in the interest of citizens that are already living inside the country – however that also implies that it is discriminating against people who do not live inside the country (*) (*). This is something that many people do not realise.

Not only does the introduction of protectionist trade policies reduce domestic economic efficiency and hurt domestic consumer, they also cause pain for the people overseas who would have made the products for us. However, if the government values the workers it is protecting more than it values domestic consumers it will go with the protection – effectively stating that it, and us as a society, do not value people overseas at all.

When we look at ourselves, it is easiest to define what we are by “what we are not” – what is the “other”. In the case of nations, the “other” is foreign governments.

Now many people would state that we shouldn’t care about those people (a point of view I disagree with). Furthermore they may call upon Adam Smith’s invisible hand to state that self-interested individuals (nations) acting in there self-interest will create the best outcome.

However, that is trash. Look at the discussion around climate change – if one country acts it benefits other countries as well as their own, and so as a result each country does less than it “should” (if we cared about global welfare) to prevent global warming. Other examples of this failure are war and trade policies, where if the countries cared about each other they would both be better off (think positive externalities, or a prisoners dilemma).

This makes me think that if we can justify having a government to solve these conflict issues at a regional level, why can’t we have a global government to solve these issues at a national level. I realise this is a big and complicated issue, and so I’d like to know what you think?

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3 replies
  1. CPW
    CPW says:

    I think it is self-evident that nations do put a minuscule weight on the welfare of non-citizens. This is most likely (IMHO) because either culturally or genetically, individuals don’t care about distant strangers. However, if you’d prefer a more PC explanation, then either a) there are greater externalities to having poor people within your local society; or b) inefficiencies make the marginal value of transfers to other nations very low (think African corruption), and it’s rational to make small ones.

    As to your other question, remember there are costs as well as benefits to more centralized governments. The global governance institutions we have already our abject failures. Why would we want more? And isn’t the coase theorem enough at a governmental level? At a practical level the voting system is always going to be a sticking point between the rich nations and the poor, populous nations.

  2. Matt Nolan
    Matt Nolan says:

    “This is most likely (IMHO) because either culturally or genetically, individuals don’t care about distant strangers.”

    Agreed – however, I want people to explicitly realise that they are placing a low weight on foreigners, rather than ignoring the fact that in any international prisoners dilemma games they are asking our government to screw other people over.

    People often don’t realise how selfish they are.

    BTW, love the externalities argument – as that is the reason I think that people often value each other in the first place 😛

    “As to your other question, remember there are costs as well as benefits to more centralized governments.”

    Indeed, I agree with you. However, it is interesting to ponder. If we are happy to have a government running a nation why aren’t we happy to have a government running the world?

    You raise some good points to answer that, but I think it would be an interesting issue to discuss further.

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