The hottest Public Choice Substack posts right now

The “other people’s money” critique misses key facts: voters also pay the taxes they support and supporters often hold most of the wealth, so backing foreign aid isn’t just a way to avoid personal sacrifice.
Psychological and coordination issues better explain why people vote for aid but don’t donate: virtue signaling, the desire for clean ‘problem solved’ stories, assurance-contract transaction costs, and time-inconsistent preferences push people toward collective solutions.
Government can legitimately reduce coordination and self-control problems, but that creates fairness questions; one practical compromise is default funding with a clear opt-out on tax forms so long-term preferences are honored without coercing everyone.

The Lerner–Lange model tries to mimic market outcomes by having a central board set prices and firms produce where price equals marginal cost, but it runs into incentive problems because state-owned firms and workers can inflate costs when they aren’t residual claimants.
Firms exist because using market prices has transaction costs like searching and bargaining, so organizing activities inside a firm can be cheaper; firms grow until rising managerial and coordination costs outweigh those transaction-cost savings.
The practical implication is that neither pure planning nor pure markets are always best: mixed systems can combine the advantages of both, and centralized planning is more workable at small scales (families or communes) than across large societies.

Higher health-care spending per person often doesn't lead to better health outcomes. That means much medical spending is likely wasted.
Large government health programs create big opportunities for fraud and rent-seeking because third-party billing is easy to exploit. Directly giving money to beneficiaries reduces those opportunities.
Foreign aid can become a target for rent-seeking and help entrench corrupt governments, sometimes contributing to coups and extremist violence. This 'aid curse' shows aid can worsen, not fix, governance failures.

An influential academic challenge shifted debate from standard public-choice critiques to focusing on voter irrationality and the idea of "rational irrationality."
Optimism about democratic capitalism was strong in the mid-1990s, but events in the 21st century have made the claim that democracy reliably manages markets and government much harder to defend.
Even long-time defenders of democratic efficiency are now rethinking their views, with recent conversations showing growing disillusionment about how well American democracy works.

Political equilibrium means that in elections, candidates tend to adopt similar policies to win votes. This makes it hard to see real change since both sides may end up supporting the same things.
Special interest groups often have a louder voice than the average voter, which can lead to policies that support their interests more than those of the general public.
There are two kinds of societies: commercial, which benefits everyone, and tribute, where a few control the resources. A commercial society allows anyone to start a business, making it more inclusive.

Get a weekly roundup of the best Substack posts, by hacker news affinity: