Official Lies: How Washington Misleads Us.

Boudreaux, Donald J.

The following story is standard fare for all economics students: voluntary exchange of private property rights leads to outcomes that maximize social welfare, but only so long as market imperfections do not exist. In the face of such imperfections, markets will not work, and correction of these imperfections by government becomes a viable option.

Of course, before the ascendancy of Public Choice during the past two decades, government action was regarded as a necessary antidote to market imperfections. Now that analysts are aware that government can fail just as the market can fail, it is an empirical question whether government interference in a less-than-perfect market is desirable or not. Data on the performance of government relative to the market is crucial in answering this question.

James Bennett (George Mason University) and Thomas DiLorenzo (Loyola College in Baltimore) provide an impressive array of statistics and anecdotes persuasively demonstrating that government is seldom to be trusted to correct market failures. The reason for this distrust is that government seems chronically unable to tell the truth about itself as well as about the social problems it addresses. Indeed, these authors show that government is, perhaps, the major source of false information and half-truths in the United States. Each of the book's ten chapters is choked with information about misinformation sponsored by, or left uncorrected by, government.

Early on in the book, Bennett and DiLorenzo return to an issue that they addressed in an earlier work, namely, the various and sundry devices Congress uses to hide the true cost of its activity.|1~ Although no secret to most readers of this Journal, Congress employs off-budget financing as one method of minimizing the reported size of government expenditures. But the authors go well beyond showing that Congress fibs about the full extent of its annual expenditures. The bulk of the book documents specific pieces of misinformation fed to the American public by its government. We learn, for instance, that the Census Bureau's estimate of the number of Americans living below the official poverty line looks only to cash income in arriving at its conclusions. This method fails to take account of a citizen's wealth as well as of non-cash assistance to the poor. Failure to consider these factors--as well as others identified by Bennett and DiLorenzo--causes an overestimate of the number of people living below the poverty line.

Other government-sponsored falsehoods include the following: that heterosexuals have just as much chance of being infected by the AIDS virus as do homosexuals; that marijuana use is not significantly less dangerous than is crack-cocaine use; that people have become ill or died in the U.S. from being exposed to pesticides used according to direction; that asbestos presents a substantial public-health problem; that the ozone hole is widening over time; that we are running out of petroleum; that we are running out of timber; and that the average American farmer is not wealthy. In addition to being false, each of these claims has in one way or another been used by government to justify programs that plausibly would meet with popular disapproval if the truth were more widely known.

Bennett and DiLorenzo also explode other myths that do not necessarily trace their origins to government propaganda. For example, some of the book's most interesting material are data comparing living conditions in the United States with living conditions in other industrialized nations. The reader learns that in 1988, while nearly all U.S. households had at least one flush toilet, more than half (54%) of Japanese households were not so equipped. And though not as poorly plumbed as in Japan, households in western Europe are less likely to have flush toilets than are households in the United States. As for diet, a poor American (one with an income in the lowest quintile of the income distribution) consumes, on average, much more meat than does the average citizen of each of the major industrialized countries. And poor Americans do not as a rule suffer from inadequate consumption of calories and vitamins and other nutrients. Quite honestly, to be poor in America is not so horrible when compared with living standards in other nations, many of which are thoroughly industrialized.

Though a plausible case can be made that political power is augmented by persistence of the myths that the U.S. is a nation whose wealth is shrinking and that American living standards compare unfavorably with those of other industrialized nations, these seemingly widely held misperceptions are a product not so much--or, at least, not only--of government lies but (also) of sensationalism in the popular press and of general ignorance of world affairs by work-a-day Americans. Nevertheless, the reader of this book cannot come away without realizing that Washington is indeed responsible for a great deal of misinformation--either directly or by giving its official imprimatur to falsehoods promulgated by others.

For academic readers taken as a whole, very little in this book will come as a surprise. Researchers in the area, say, of welfare policy will not be startled at the information uncovered by Bennett and DiLorenzo regarding welfare recipients and real-income distribution in the U.S. Likewise, researchers in the area of environmental policy will not be startled by the facts presented on the current scientific learning about the state of the environment. But every reader is sure to find a good deal of information in this book about which he or she was previously unaware. One benefit of this book is that it nicely compiles many data on a broad range of policy topics in one place.

More importantly, though, this book is not aimed primarily at an academic audience. Its target reader is the non-academic who has an interest in public-policy issues. This target reader will be well-served by learning that much of what he or she thinks is true is, in fact, untrue. The academic reader, who may wince a bit at the occasional spurts of overwrought language, nevertheless stands to profit from this book. The academic will profit from exposure to the institutional details of the myriad ways government propagandizes on its own behalf. And for those academics who maintain the illusion that government is generally to be trusted to correct market failures--especially market failures stemming from imperfect information--this book is a must read.

Donald J. Boudreaux Clemson University

Reference

1. Bennett, James T. and Thomas J. DiLorenzo. Underground Government: The Off-Budget Public Sector. Washington: Cato Institute, 1983.