I admire George McGovern's good cheer -- but not his understanding of political economy. Clearly, government has an important role in preventing harm, e.g., protecting human rights and the environment. It's far more difficult to identify government investments that improve well-being. It's not a null set but it is a relatively small set. Investments in public health and education are examples.

Yet, despite his 22 years in Congress, the failure of his New England country inn due to silly regulations, and his recent harassment at South Dakota airports, he remains an optimist.

In the December Harper's Magazine, he lauded our government's accomplishments: "Over the past twenty-five years we have made great advances in the sciences, in education and health care, in protecting the environment, and in securing a more peaceful economic order, and I have reason to believe we will do even better over the next twenty-five years."

The U.S. is, beyond doubt, history's most successful large-scale social experiment. Yet, political pathologies abound. The reason is simple: when it goes beyond the basic functions of maintaining order, and attacking injustice and the abuse of power, government usually becomes an engine of plunder. This is the default result of political power. In general, across time and cultures, governments transfer wealth and opportunities from the weak and unorganized to the well-off and well-organized. This problem pre occupied America's Founders.

The Founders attempted to create a polity where it was difficult to employ the machinery of government to transfer wealth and favorable opportunities. Rather, they sought institutions that gave individuals incentives to better themselves by creating, not transferring, value. Hence they limited the role and scope of national government to a few basic functions delineated in the Constitution. The list is short. When exceeded, plunder is a logical consequence. Here is an example that assaults our economy and environment while hurting poor consumers and Third World farmers.

Rice farmers are about to empty one of Arkansas' biggest aquifers, this in a state that gets 50 inches of rain annually. (Iowa, in contrast, gets almost 40). Their solution is to direct the Army Corps of Engineers to build a $200 million irrigation project to pump water from the White River. The New York Times reports this amounts to about $300,000 per farmer; their existing subsidies deliver $3.10 per bushel vs. the market price of $1.40.

The Bureau of Reclamation engaged in similar wealth-transfer water boondoggles in the West, creating many of the problems and pathologies we face today. Yet those with an interest in government aid either are ignorant of or simply ignore such failures. John Edwards, executive director of the White River Irrigation District, said, "There has been a federal interest in irrigation in 17 Western states. Now that water problems are coming to the East, we can learn from the past to make this a better project for the future."

Government subsidized water will only extend and exacerbate the problem. As long as farmers do not face the cost of resources, and indeed are paid to use them, overuse is the inevitable result. Subsidies foster waste and support the inefficient use of natural resources.

Nationwide, the Environmental Working Group found that "ten percent of the biggest (and most profitable) subsidized crop producers absorbed two-thirds of all subsidies.... Sixty percent of all farmers and ranchers were completely ineligible for program crop subsidies." Yet, these programs were justified by the rhetoric of "saving the family farm." This is government in action.

One such beneficiary of taxpayer generosity has been Bernie Ebbers, former WorldCom CEO. WorldCom defrauded investors of $9 billion through "accounting irregularities" and prosecutors are currently investigating Ebbers's role in the scandal. According to the EWG, Angelina Plantation in Louisiana (of which Ebbers is an owner) received almost $3.9 million in subsidies from 1998-2001. Nearly all for rice alone.

I admire McGovern as a bomber pilot hero of WWII and a courageous politician, but surely not as a political economist. His enthusiasm for doing good trumps his understanding of a fundamental rule: When government goes beyond the limit of its competence, folks like Bernie Ebbers usually gain. The environment, the taxpayers, and the consumers usually lose. That's the way the world works.