What is that nebulous thing called politics? Might it be
that the practice is essentially exploiting or creating what are known as
principal-agent costs? That is, might politics be skill in putting oneself in
place of an agent’s principal(s) (and perhaps principles).
In the U.S. Senate bill to obviate the “fiscal cliff,” for
example, the Democrats may have agreed to benefits for the Republican lawmakers’
campaign backers in exchange for going along with a more progressive federal
income tax system. Among the added provisions are special expensing rules for
certain film and television productions—no doubt those made by particular
contributors. The provision for tax-exempt financing for the New York Liberty
Zone around the former World Trade Center may also be a favor to a particular
someone. Lest one wonder why an extension of the American Samoa economic
development credit is doing in an expedited measure to obviate the “fiscal
cliff,” the answer may have to do with a particular Republican lawmaker’s
relationship with someone having an interest in American Samoa. I can only
speculate here, as I was not privy to the actual relationships and
negotiations. However, the sheer strangeness of such provisions in such a bill
suggests that the particular political or economic interests of particular
Republican lawmakers may have been the culprit.
Such interests need not stem from particular relationships.
To get the Republicans to “move on principle” regarding progressive taxation,
the Democrat negotiators may have agreed to give on particulars on another law—in
this case, on Obamacare. The bill also contained a provision to remove the
Community Living Assistance Services and Support program, or CLASS, which would
have allowed millions of elderly and disabled people to stay in their homes
rather than be placed in institutional care.
Generally speaking, the pattern involves essentially “buying
off” particular Republican lawmakers so they will “shift over” on a larger
principle—in this case, progressive taxation. Give a bit on Obamacare and
include a provision financially beneficial to a particular Republican lawmaker
or one of his or her financial contributors or patrons—anything satisfying a particular interest of a particular lawmaker—so he or she will
move from the preference of his or her constituents. The agency cost is the distance of the lawmaker (agent) from his or her
official constituents (principals).
If the skill called politics involves a politician’s
particular interests at the expense of one of his or her principles or official
duties (i.e., to constituents), then negotiation cannot be expected to be
confined to compromising on the merits of the bill itself. Rather than merely
going back and forth on numbers for the upper income subject to the Bush tax
cuts, a Republican negotiator might propose an unrelated provision benefitting one of his or her friends, business
associates, or campaign contributors. Granted the provision, the negotiator would
then give on the numbers. One might ask whether the inclusion of particular exogenous
interests is necessary to negotiation
on a given policy. Wouldn’t the final product in terms of the policy be better
were the unrelated benefits kept out of the mix? That is to say, is their incorporation
a decadent or inferior form of politics, or an essential element that cannot be
removed? Perhaps the answer lies in whether negotiation on a given policy, such
as deficit reduction, can be done without the negotiators bringing up their
particular interests (as a means of shirking their principles or duty). Perhaps
ethical leadership in politics involves refusing to enable (or exploit) another’s
“agency costs” by incorporating the unrelated provisions, in which case
politics itself could find higher ground and the resulting policy would more
closely match the preference of the body politic.
Source:
Reuters, “Fiscal
Cliff Bill Proposed By Senate Packed With Mix of Handouts, Takebacks,”
Huffington Post, January 1, 2013.
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