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Ben Bova: When do we need government to step in?
In 1776, two revolutionary documents were given to the world.
One was the American Declaration of Independence, written mainly by Thomas Jefferson. The other was an economic treatise, "An Inquiry into the Nature and Causes of the Wealth of Nations," written by Scotsman Adam Smith.
The revolutionary thought in the Declaration of Independence was that governments are created by people to secure their rights to life, liberty and the pursuit of happiness, and "whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it."
Governments exist only through the consent of the people; if the people don't like their government, they have the right — indeed, they have the duty — to change it.
The Declaration of Independence was the guiding flame for a political revolution that is still being fought in many parts of the world. Here in the U.S., we fight that revolutionary battle every time we go to the polls to vote.
Adam Smith's "Wealth of Nations" ushered in an economic revolution. He championed the power of the free marketplace to make the best economic decisions, and showed that government interference in the freedom of the marketplace almost always leads to economic policies that favor some special interest group, rather than the nation as a whole.
So, do we allow the marketplace a free reign or run to our elected officials to slant the marketplace the way we want it to lean?
It's tough for elected officials to keep their fingers out of the economic marketplace. Blocs of voters and powerful interest groups are always after elected officials to make special deals that favor them. It happens right here in Southwest Florida all the time.
Right now we're seeing our elected officials tussle with the problem of so-called "affordable housing." Most workers — including police officers, teachers, and the carpenters, plumbers and other tradesmen so much in demand — can't afford to reside in affluent communities such as Naples; they have to live far outside the city and spend a lot of time — and money — commuting to their jobs. Should government subsidize housing for those who can't afford to live in wealthy neighborhoods?
Proponents of the free marketplace say, "Hands off! Let the marketplace work its magic. If it's tough to get decent workers because they don't live in our community, just wait a while and workers' salaries will rise high enough to allow them to buy better housing."
But pressure groups counter, "That takes too long, and it will just raise the costs of labor. Encourage builders with government subsidies (i.e., tax dollars) to build low-income housing."
Who benefits from government subsidies for "affordable housing?" Certainly the builders do.
And the workers, too: Not only do they get housing they couldn't ordinarily afford, but sooner or later, the marketplace exerts its power and they sell their "affordable housing" at a much higher price than they paid.
Meanwhile, the builders who have agreed to put up "affordable housing" are rewarded by the politicians: they are allowed to build higher-density housing than the ordinary zoning rules would permit.
So the builders benefit. The workers who buy "affordable housing" benefit — especially when they re-sell their housing at much higher prices. And, oh yes, the politicians benefit also. Those builders can be very helpful with campaign contributions.
The taxpayer foots the bill for any subsidies the government has allowed. And for the denser housing developments the government has permitted. And for the increased traffic and crime that such developments bring.
Speaking of housing, why don't we see more solar power in Sunny Florida? Here the free marketplace seems to be running against good ecological and economic sense.
Florida does indeed get lots of sunshine, which can be used directly as heat to warm domestic hot water or converted into electricity through solarvoltaic cells to produce clean electricity. Either way, solar power can lower a householder's utility bills.
So why is solar power used so rarely? Seems to me that the cause is that ol' free marketplace. Builders don't put solar panels onto the homes they're building because that would raise the purchase price of those homes. Builders don't want to add the price of solar power to their offerings. If a buyer wants solar power, they reason, let the buyer go out and purchase the solar panels for him or herself.
Buyers rarely do that because those solar panels are still rather costly. It takes several years, at best, to amortize the cost of installing solar water heaters or solarvoltaic panels on your home. Instead of looking at the long-term savings, most buyers balk at shelling out the initial cost of solar panels.
So we pay much more, in the long run, for heat and electricity that sunshine could have provided. Short-term thinking outweighs long-term benefits.
When the marketplace isn't doing what people want it to do, people turn to government. State Rep. Trudi Williams of Fort Myers wants the state government to offer some incentives to people who "go solar." Gov. Jeb Bush has included such incentives in his recently unveiled energy policy.
In this case, government could provide the "pump priming" that is needed to get the free marketplace moving in an area where it has not moved before. If tax incentives or other government encouragement can get people to put solar power into their homes, eventually the free marketplace will take over and the taxpayer's role in the situation can be reduced or eliminated altogether.
Of course, the politicians will be tempted to continue the incentives if solar power becomes popular. The only thing more difficult than getting a government program started is to get it stopped.
Free marketplace or government programs? In the long run, the marketplace makes the effective decisions. But in the meantime, pressure groups can make the government act.
The trick is to make the government act wisely, and not merely for narrow special interest groups.

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