In a Washington Post obituary for billionaire John Kluge, Terence McArdle explains how he made his fortune by creating Metromedia, the nation’s largest chain of independent television stations:
Metromedia stations relied on a mix of local programs, old movies and syndicated reruns that often ran counter to what the big three network affiliates had in the same time slot.
Kluge’s key insight was:
Mr. Kluge believed that if the networks had an 80 percent share in a major market, 20 percent of the market wanted to watch something else.
And that’s a key difference between the market and government, one that’s so obvious we may fail to notice it. Kluge figured he could make money by offering a product that only 20 percent of consumers wanted. Many television networks these days make money by attracting 1 percent or less of the market. But in the political world, it’s usually one-size-fits-all. Politicians decide, and then that’s what we all get – phonics in the schools or not, prayer or not, instead of a market of schools from which parents could choose. Health insurance with 99 mandated coverages whether you want them or not.
I made a similar point in Libertarianism: A Primer (p. 189), on politics as a package deal:
Sesame Street recently gave us an example of what that means. In an election special, the Muppets and their human friends have $3 to spend, and they learn about voting by deciding whether to buy crayons or juice.
“Rosita: You count the people who want crayons. Then you count the people who want juice. If more people want juice, it’s juice for everyone. If more people want crayons, it’s crayons.
“Telly: Sounds crazy but it might just work!”
But why not let each child buy what he wants? Who needs democracy for such decisions? There may be some public goods, but surely juice and crayons don’t count. In the real world, one candidate offers higher taxes, legalized abortion, and getting out of the War in Vietnam, another promises a balanced budget, school prayer, and escalation of the war. What if you want a balanced budget and withdrawal from Vietnam? In the marketplace you get lots of choices; politics forces you to choose among only a few.