The employee of a corporation who buys something for $10 and sells it for $8 is not likely to do so for long. Someone who, in a family setting, does much the same thing, may make his wife and children miserable throughout his life. A politician who wastes his country’s resources on a grand scale may have a successful career.
The excerpt above reminds me of Milton Friedman’s brilliant quote about the four ways in which you can spend money. But why don’t voters punish such extravagance? Well, that’s what Caplan’s book seeks to explain, so if you see it at a local bookstore, pick it up. I love what I’ve read of it so far, and you can read more about it from Tyler Cowen, Don Boudreaux and Greg Mankiw.