Public Choice Links, 2/06/2026

Cowen and Fukuyama on state capacity; Matt Bruenig on private provision of government services; Andrew Biggs on Social Security; Buchanan and Rawls

Tyler Cowen and Francis Fukuyama debate the issue of state capacity in America. Fukuyama’s primary claim is that the American public is to blame for the inability of government to accomplish things, because people are so distrustful of government that they want to impede its capacity. Cowen instead believes that the government is doing well at accomplishing things, and that the problem is state governments dominated by leftists. Cowen says,

I think when your state has two-party competition for real, things tend to go pretty well. That’s Virginia. It’s many states in this country. It’s not California. Electoral competition works.

In Montgomery County, Maryland, where I live, the Republican Party might as well be nonexistent. In fact, we aren’t even governed by the Democratic Party. It’s just the teacher’s union running everything. They tell everyone that our school system is great, but it doesn’t show up in test scores. We spend way more per student than any other school district in the state, but it just goes to pensions and administrators. Meanwhile, our transcontinental railroad project recedes further into the future, with likely usage on the decline. The central plan is even more hostile to the people who actually live here than I realized when I wrote that post.

Matt Bruenig writes,

This outsourcing approach to welfare policy is inherently vulnerable to fraud. The way these outsourcing programs work is that the government gives money to a private entity, and then that private entity is required to use it to provide services to individuals. Any money not spent on the services is kept as profit.

It sounds as though he thinks that the solution is for the government to never outsource service provision to private firms. Have government run all of the day care centers, old age homes, low-income apartment buildings, and so on. What could go wrong?

I would just point out that if people were spending their own money, including money given to them by the government, they would not spend it on nonexistent day cares.

Andrew Biggs writes,

I’ve long been an advocate of a flat benefit structure for Social Security. That is, rather than acting as an increasingly expensive pension plan—where the top half of the income distribution receives almost two-thirds of total benefits—Social Security reform should follow other Anglo countries and gradually transition the retirement program into a robust but limited safety net for poor seniors.

In other words, he would end the pretense of SS as a pension plan and make it a simple welfare program. He points out that the faux pension plan became radically more generous in the 1970s as Presidents Nixon and Carter curried favor with seniors.

A replacement rate measures Social Security benefits as a percentage of the retiree’s prior earnings.

…From 1969 to 1981, replacement rates for medium earners rose from 29 percent to 54 percent—an 86 percent relative increase in wage replacement

Pointer from Timothy Taylor.

James R. Rogers writes,

While the questions Buchanan and Rawls sought to address differed—Rawls focused on deriving general principles of justice while Buchanan and Tullock focused on the constitutional “emergence of democracy”—each addressed their questions using a social contract approach that shared strikingly similar attributes. Both theories developed an argument in which rational individuals at a hypothetical initial stage would unanimously consent to a framework that obliged them to accept subsequent policy choices even when those choices ran contrary to their individual policy preferences at the later time.

substacks referenced above: @

It’s Fine to Embrace FDR’s Vision of Social Security

@

The real reason behind Minnesota's Somali fraud scandal