Competition, the Constitution, and waste

Above all, competition generates useful information and true knowledge. As Justice Oliver Wendell Holmes wrote in a celebrated dissent in the 1919 First Amendment case Abrams v. United States, “the best test of truth is the power of the thought to get itself accepted in the competition of the market.” In economic markets, competition elicits dispersed information about supply, demand, costs, and preferences and transmits it in the form of prices to producers and consumers. In the “marketplace of ideas” — from politics to religion, science to philosophy — competition entails publicizing ideas and testing them against the experiences and observations of others. In some areas, this process produces a consensus of popular or professional opinion. Such consensus invariably changes over time, but in many important fields (such as engineering and the health sciences) it is demonstrably progressive — cumulating and improving rather than oscillating.

Competition, properly structured, is the most effective and least coercive means yet discovered for allocating that which is scarce and inducing social cooperation for the benefit of all. In its desuetude, we are building autonomous political monopolies in the public sector that control dependent economic monopolies in the private sector, with much less in the way of democratic accountability than we have grown accustomed to. This does not feel like progress. It should stimulate us to reconsider the functions of competition in our constitutional order, and to find ways of re-introducing them — no doubt in new forms — into contemporary political institutions.

It used $4.3 billion of stimulus cash as a slush fund to bribe states into adopting a slew of Obama-approved education policies. Forty-one states took the bait, wasting millions of taxpayer dollars and administrative man hours begging federal bureaucrats for money. (Louisiana’s application alone was 260 pages, with a 417-page appendix.) And in the end, Obama rewarded only those states that gave in to the teachers’ unions by letting them approve the systems by which teachers are evaluated.
Education Secretary Arne Duncan loves to talk about the “competition” that the program inspired. But there is a big difference between competing for federal funds and real market competition to win the hearts of parents interested in finding the best education for their children. When Apple competes in the mobile music industry, it does so by winning over consumers with a better product. When Amazon competes in online retail, it does so by serving customers better. Not so with Race to the Top, in which states merely competed to make government bureaucrats happy. Parents are left looking up at the “commanding heights” that bureaucrats and Obama allies still control.