Mission and Content Charter

Government secures the conditions under which people can create, own, and exchange what they produce. Law is also used, often, to move an advantage from one party to another. Bastiat called the extreme version of this legalized plunder. We use the milder form of his idea: a transfer is still a transfer when it is lawful, popular, and well intended, and it should be examined on what it actually does.

Public technology spending is an ordinary place to find this. A subsidy that buys investment which would have happened anyway, a contract term that protects an incumbent supplier, a rule written to the specifications of the firms it governs. Each is easier to defend than to justify, and each is worth reading closely.

Costs are borne by people, never by abstractions. A tax levied on a business is paid by its customers, its workers, or its owners. A compliance obligation works the same way. It is a price, it is paid, and the fact that it appears on no invoice does not make it free.

The costs easiest to miss are the ones that never appear at all — the entrant deterred, the competitor who never formed, the improvement not attempted. The principle of the seen and unseen is the discipline here, and it is why policy is best judged by its effects after everyone has responded rather than by its intentions.

Entry restrictions are the most common instrument of regulatory capture, and have been for as long as there have been regulators. An incumbent's most efficient strategy is often not to compete but to raise the cost of entry in the name of protecting the public, and alarm is usually what makes that easy to pass. So a rule is worth reading for what it costs an entrant, and not only for what it promises a citizen. Behind every such rule is one of two postures a government can take toward a market.

The first presumes bad faith and regulates entry to prevent harm before it occurs. It restricts the market to participants who can afford the cost of entry, and it promises a degree of safety that is hard to actually deliver.

The second presumes good faith, keeps entry open, and imposes real and enforced consequences on those who cause harm. It accepts that harm will sometimes occur, and it punishes it when it does.

We favor the second, for a reason that is empirical rather than sentimental: restricting entry does not reliably eliminate bad actors, and it tends to select for large ones.

Our default is that people and firms may try something new without asking in advance. Regulation is a last resort. It is warranted only when a harm is real and liability, contracts, the courts, and competition cannot possibly address it. We would rather hold people and firms accountable for the harm they actually cause than decide in advance who may compete.

Accountability here means the people and firms who cause harm in a market. It is not a way of assigning blame to public servants. Their outcomes we explain by the structures they work inside.

There is a difference between competing in a market and competing in a capitol.

Capitalism is free enterprise: value created, and rewarded in proportion to the value.

Capitolism is the relocation of competition from the market to the seat of government, where established interests secure through policy what they could not secure through performance.

Capitolism is not a partisan practice. It is available to anyone with something to protect and the resources to protect it, and it is practiced across the political spectrum. Our principles cut against entrenched interests of every political description, which is why they do not reduce to a party position.

The American premise is that a person can create value and be rewarded for having created it — that circumstance is not destiny, and that the arrangements we inherited are not the best ones available.

That premise applies to public institutions too. The conviction that better is possible is not naive; it is the ordinary condition of a country that has repeatedly made itself better. We work on public institutions because they are worth the effort, and because the people inside them are largely trying to do the same thing.

When people in government do the wrong thing, it is usually because the rules reward it. Fixes that change what gets rewarded tend to stick. Fixes that only ask people to behave better, under the same rules, rarely do.

Appropriation cycles, procurement rules, and contract terms produce outcomes no individual would choose. We analyze structures, because that is usually where the cause is and because it is where a reader can actually do something.

A public investment is assessed on what it delivers relative to total cost across its life. An inexpensive system that fails is not efficient, and a cheap acquisition that forecloses competition for a decade was never cheap.