The Outstater

April 16, 2024

The Pareto of Campaign Promises

I AM MAKING A LIST of campaign promises leading up to this primary election. No, this is not meant to be a cynical exercise to bash the political class. I am sincerely trying to understand, with all these promises flying around, why nothing ever happens. 

I may have discovered it — or them, several principles of political life that will help you sort out this season’s candidates.

An adjunct of our foundation, Dr. Sam Staley, first introduced us to what he called “the Ten Percent Rule” for analyzing budgets. It says that in any particular effort if the budget is not changed by at least 10 percent either up or down, nothing will really happen. And that is regardless of the nobility of the effort, e.g., “Make America Great Again.”

In respect to this primary campaign, local examples would be the promise to eliminate Indiana’s relatively small income tax or the promise to leverage government funding to invest in rural Indiana. In both examples, the dollar amounts sound impressive but they are minuscule in relation to either the tax burden in its entirety or the macro-economic challenges of rural communities. 

Even if such promises survive intact our envy-skewed democratic process, a possibility close to zero, they ignore Staley’s Ten Percent Rule. Again, nothing really would happen; the only real change being one or another candidate’s election — the sole purpose, please know, of the promised policy change.

There is another concept that is as useful in assessing candidates. It is “the Pareto Principle” or more commonly “the 80/20 Rule.”

The principle states that for many outcomes roughly 80 percent of consequences come from 20 percent of causes. It is an adaption of the work of Vifredo Pareto who showed in 1906 that approximately 80 percent of the land in the Kingdom of Italy was owned by 20 percent of the population.

That, however, better describes the outcome of either socialist, fascist or monarchal rule. There is a lesser known tangential principle that is more applicable to the typical Indiana election. It is Pareto Optimal, finding oneself in a situation where no policy is available that makes one individual better off without making another worse off.

In regard to campaign strategy, for conservatives at least, this is like asking your candidate to drink battery acid.

Fortunately for him or her there is a related principle with better options. It is the Pareto Improvement, where some agents will gain and no agents will lose. 

This is GOP nirvana.

A legal scholar, Richard Epstein, puts a finer point on it. He says that Pareto Optimal can include one or both of two additional standards making for a perfectly designed campaign promise: 

All of which is what is being attempted in the ongoing flurry of campaign promises. “(They) satisfy the basic utilitarian principle,” Epstein says, “that the use of government power should create win-win situations.”

You will note, though, that does not mean anything will happen to improve the electorate’s general plight or overcome a society-wide challenge. The “win-win” applies to the rulers, not us.

And finally this from the late Angelo Codevilla: “The key to understanding what political parties in power do is the insight, emphasized by Pareto, that any organization’s practical objectives turn out to be what serves the interests and proclivities of its leaders.”

I apologize. This turned out to be a cynical exercise after all. — tcl


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