The excellent blog Cafe Hayek today turns us onto a great quotation by economist and writer Thomas Sowell. In Sowell’s 1979 essay within the book Adam Smith and Modern Political Economy, he explained how governments throughout history have spent more than their countries’ people could bear with very little to show for it:
History showed that governments habitually mismanaged economic affairs, that such mismanagement was difficult to correct (in contrast to the market’s swift correction by bankruptcy), and the the whole bias of government projects was toward things that were big and showy rather than useful. A government will often create works “of splendour and magnificence” to be seen by those whose applause will flatter its vanity and promote its political interests but will neglect “a great number of little works” which may have “extreme utility” but present no “great appearance” to “excite … the admiration” of passers-by. Down through the centuries governments have been prone to operate at a deficit, often using tricky fiscal devices to conceal just how much they were in debt.