Imagine a primitive world in which people live by hunting
down and eating wild animals and by growing food on plots of
land selected and developed for the purpose. Being what they are,
it is inevitable that some people will use the tools required to
kill animals as a means of intimidating and exploiting others,
laying claim to their land and other items they have acquired and
built up. People can protect themselves by banding together to
fight the oppressors who can increase their power by also banding
together.
Given this uncertainty it is not surprising that a majority of the
population would agree to establish an association within a given
area to provide protection of individual property rights, which
can be accomplished by creating a police force to ensure enforcement
of laws established for the area. Since individuals differ, the
formation of this state will necessarily infringe on individual
freedom to live one's life without interference from others, since
not everyone will agree on the state constitution and laws that
arise therefrom. But individuals will agree to water down these
freedoms by institution of majority rule rather than have them
exerped by criminal behavior.
While majority rule would seem a reasonable compromise in the
conduct of public policy, an alternative is also evident
in many real-world situations. A collection of individuals within
the state may band together and take control, providing protection
for all property rights except those that people within this
group can gain from violating. This group can maintain its
control through the use of force and by ensuring that the majority
of the community is free from crimminal behaviour on the part
of individuals. People will put up with such a dictatorship if it
maintains a degree of law and order that otherwise would not
exist, although majority rule would still be their preferred system.
Even under a democratic system of government some benefits of
majority rule are lost. It is too costly to have a vote on
every minor issue of public policy to ensure that a majority
agrees. Alternatively, groups within the community will create
political parties one of which becomes charged with running the country
in a manner that will receive overall majority support. Failure
to maintain such support will result in the group being replaced
by an alternative political party when the next vote occurs.
It is reasonable to expect that, if everyone in the society
understands which regulations of a free-enterprise economy will
increase national output, a majority vote for political parties
will cause the one selected to engage in wealth-maximizing public
policy from which a majority will benefit in each case, although
agreed-upon redistributions of income may be required from time
to time. Where the majority does not understand the effects of
particular policies, however, tariffs being a good example, the
party in power will gain from undertaking some policies that will
benefit certain groups while having adverse effects on overall
national wealth.
Our effort in the topics that follow is to analyse government
policy in more detail. You should now be ready to take a test on your
understanding of the above analysis. While detailed answers are
available on-screen you should think about the questions and construct
your own answers before accessing the ones provided.
To analyse government policy, we must understand the role of the
state, in which government and the rules directing it are created.