LSAT 77 – Section 2 – Question 24

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Type Tags Answer
Curve Question
PT77 S2 Q24
Necessary assumption +NA
+Hardest 145.859 +SubsectionMedium

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The stimulus tells us that tariffs help a small group of people (let's say 10 people) but hurts a large group of people (let's say 100 people). You take a poll of all the people (110) and no surprise, most are opposed to the tariffs (say all 100 are opposed).

Great. That's it. 10 people are for the tariffs. 100 are against.

Now imagine you're the politician and you know these facts. What platform are you going to run? An anti-tariff platform? Maybe. It's not entirely unreasonable. But you should identify the assumption you'd be making if you were to run anti-tariff. Namely, that the tariff issue is important to those 100 people.

Obviously, you want to harness votes and avoid driving votes away. If you assume the world is such that tariffs matter equally to everyone, then an anti-tariff platform would harness 100 votes and drive away 10 votes. You come out +90 votes, good.

Negating (A) severely challenges the assumption. It opens up the possibility that the actual world is one in which the pro-tariff 10 people care way more about the tariff than the anti-tariff 100 people. If that were the case, then an anti-tariff platform would for sure lose you 10 votes without a guarantee of adding any additional votes.

We know this intuitively in the real world. People care about many many things. But not all of those things translate into political action through voting. In other words, the set of things that people vote on is a small sub-set of the things that people care about.

The phenomenon that (A) hints at is actually very well documented in economics and politics. The issue is one of concentrated benefits versus diffuse costs. Think of it like this. There's a set of laws that allow you to take a penny from everyone in the country each year. You're net positive roughly $3 million each year. Everyone is hurt one penny each year. Who cares about that law more? Of course you do. You care intensely that that law remain in place and you will take political action to ensure that it does. This would at minimum include voting on that basis but more likely even include lobbying. Me? I sort of care a little maybe that that law gets repealed. Certainly I don't care from a selfish economics perspective, after all I only stand to gain 1 penny. I have to find motivation to care from a justice or fairness principle and that's harder to muster. I very likely will not take any political action on this issue.

In most states, lobbyists ensure that legislation force the retail distribution of cars through dealerships, even if direct distribution from the manufacturer to the consumer is more economically efficient. But the benefits of this regime are concentrated to the dealerships (it's their entire livelihoods!) while the costs are diffused to everyone else (everyone pays a little more for their cars and manufacturers earn a little less). The vocal minority with a lot to gain will organize politically while the indifferent majority with little to lose individually will not. The end result is a net loss for society.

The presence of concentrated benefits versus diffuse costs is a bug in our political system, not a feature.

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