Bryan Caplan explains the Special-Interest Secret:
Behind every policy that does more harm than good, there’s a special interest that favors it anyway. The steel tariff was bad for consumers, steel-using industries and foreign steel producers, but the steel lobby still pushed for it. Farm subsidies are bad for both taxpayers and unsubsidized farmers, but in 2002 the American farm lobby got a 70% increase in government support. The minimum wage is bad for consumers, employers and low-skill workers who get priced out of their jobs, but unions are hard at work to raise it again.When special interests talk, politicians listen and the rest of us suffer. But why do politicians listen? Social scientists’ favorite explanation is that special interests pay close attention to their pet issues and the rest of us do not. So when politicians decide where to stand, the safer path is to satisfy knowledgeable insiders at the expense of the oblivious public.
This explanation is appealing, but it neglects one glaring fact. “Special-interest” legislation is popular.
(Emphasis mine.)
Some examples:
Keeping foreign products out is popular. Since 1976, the Worldviews survey has always found that Americans who “sympathize more with those who want to eliminate tariffs” are seriously outnumbered by “those who think such tariffs are necessary.” Handouts for farmers are popular. A 2004 PIPA-Knowledge Networks Poll found that 58% agree that “government needs to subsidize farming to make sure there will always be a good supply of food.” In 2006, the Pew Research Center found that over 80% of Americans want to raise the minimum wage. It is safe to assume, then, that few people want to abolish it. These results are not isolated. It is hard to find any “special interest” policies that most Americans oppose.
Why? The public suffers from anti-market bias:
The principles of economics are intellectually compelling; but emotionally, they fall flat. It feels better to believe that greedy intentions imply bad consequences, that foreigners destroy our prosperity and that price controls are a harmless way to transfer income. Given these economic prejudices, we should expect policies like steel tariffs, farm subsidies and the minimum wage to be popular.None of this means that special interests don’t matter, but it does put their activities in a new light. Special interests do not have to sneak behind the majority’s back; they just need to ask for the right favor in the right way. The steel lobby could have demanded a big handout from the federal government. But that would have struck many voters as welfare for the rich; steel-makers can’t expect the same treatment as farmers, can they? Instead, the steel lobby took the crowd-pleasing route of blaming foreigners and asking for tariffs. Tariffs were less direct than a naked subsidy from Washington, but they enriched the steel industry without alienating the majority.