Politicians Are Not Inept — They Do What We Ask of Them

The Objective, November 16, 2025. Trascript. Video. Podcast

Benito Arruñada (Vegadeo, Asturias, 1958) is Professor of Business Organization at Pompeu Fabra University, an affiliated professor at the Barcelona School of Economics, and a researcher at the Foundation for Applied Economics Studies (Fedea). But above all, he is a member of an exclusive club: repeat guests—he appeared on El Podcast del Liberal exactly one year ago.

Back then, I introduced him by quoting a headline from La Vanguardia in which he was cited as saying: “Don’t blame the politicians: the fault is ours.” That provocative idea has now grown into a book, also titled The Fault Is Ours, subtitled: “How Citizens’ Preferences Block Reform in Spain.”

ARRUÑADA’S THESIS
Arruñada’s argument is straightforward: Spaniards routinely attribute all major social problems—unemployment, corruption, the deficit, poor education—to the ineptitude of those in power. And they may indeed be inept, but they are our inept. We elect leaders in our own image. Spaniards vote on affinity, not competence. Between the property registrar and the trickster who plagiarized his dissertation, the latter often wins. Between a philosophy professor and a political talk‑show pundit, we choose the pundit. And the results are predictable.

INTERVIEW
Q.— Many people say our woes stem from a political caste that, together with banks and the Ibex 35, does whatever it pleases.
A.— The data I examine in the book show something very different. There is a remarkable similarity between the preferences of Spanish citizens—as expressed in surveys—and the decisions taken by their governments. Spaniards are, by European standards, highly supportive of state intervention: state control of the economy, state responsibility for individual welfare, tight regulation of competition, and redistributive taxation. Politicians largely follow these demands.

Q.— And that is the problem.
A.— Exactly. We ask for the impossible. We demand expansive public services but refuse to pay the taxes needed to fund them. We want good jobs but reject labor‑market liberalization. We want central urban housing while blocking construction. Our demands are contradictory—not necessarily our politicians’ competence.

Q.— Some say today’s leaders are nothing like the giants of the Transition.
A.— Not entirely true. There is indeed a difference in résumés: today’s political class has lower human capital, and if most MPs left politics, they would earn less. Those of the 1970s and 1980s were more employable outside politics. But in the end, today’s politicians are those voters have chosen. Voters even stick with their choice after corruption scandals. Because parties compete, they would present better candidates if voters rewarded them. But surveys show Spaniards vote more on emotional than rational grounds. Competence counts very little. We pick people who resemble us and belong to our tribe—a fan mentality more pronounced in Spain.

Q.— In your book you are not particularly indulgent with figures such as Felipe González.
A.— Leaders operate within the boundaries set by public preferences, but that does not absolve them. They must manage the discretion they have. I think two major errors explain today’s institutional decline. First, the framers of the Constitution held an ingenuous idealism that still costs us dearly: they assumed separation of powers would hold up by itself, without safeguarding judicial independence or limiting partisan capture. They encouraged a notion of freedom detached from personal and fiscal responsibility. And they designed a system that decentralized, expanded public spending, and socialized more—but never the reverse. That idealism still lingers.

Second, Felipe González’s governments introduced regressive reforms based on ideas already becoming obsolete. Today’s “sanchismo” is simply the logical continuation of a degeneration that began in the mid‑1980s: politicization of the judiciary, scrapping constitutional review, educational and civil‑service reforms, and the politicization of savings banks. And note: later center‑right governments with absolute majorities did virtually nothing to reverse institutional decline. Replacing Sánchez will not magically fix these structural issues.

Q.— You are also critical of intellectuals—particularly Ortega y Gasset.
A.— Whenever I read Ortega, I admire his prose and am baffled by the superficiality of some judgments. His disdain for productive activity, merchants, and industry does not correspond to the Restoration era he criticizes; it is even older.

Q.— Spanish intellectuals have historically lacked economic training.
A.— Economic and institutional. And perhaps even more important, they often lack a scientific attitude. They write beautifully, but misunderstand the mechanisms that sustain a modern society. Their failing is twofold: they could have learned more, or refrained from influencing politics. Their ignorance did not stop them from destabilizing the society that privileged them.

Q.— When things go wrong, they walk away. When Ortega saw the Second Republic failing, he wrote: “This is not it, this is not it!”
A.— He never apologized or took responsibility. He even blamed Restoration‑era governments for not stepping aside sooner so younger generations could take over—when such a shift would merely have advanced the mistakes.

Q.— That intellectual pattern still persists.
A.— Less common, but still present. During the 2008–2014 crisis, the disaster was blamed on “crony capitalism,” a demagogic label that fueled far‑left populism. But Spain hardly has capitalism. What we have is a “crony state.” Spaniards demand more public companies and more state protection, then complain about inefficiency. Despite its prominence, we elect rulers based on affinity, not competence.

Q.— You write that elite corruption is denounced repeatedly, but mass corruption never is.
A.— The “extractive elites” narrative, popularized by Acemoglu and Robinson, is simplistic. Humans behave similarly across roles—elite, mass, athlete, professor, journalist—and act extractively whenever they can. Think of “With VAT or without VAT?” Individually trivial, collectively enormous.

Q.— Mass corruption doesn’t just redistribute income—it wastes it. High‑speed rail is one example.
A.— Exactly. The Barcelona–Madrid high‑speed line was not profitable, and the others less so. Yet people happily travel by high‑speed rail without awareness of the real costs. If ticket prices reflected those costs, enthusiasm would fall.

Q.— That ties to your central thesis: collective decisions fail because we are poorly informed.
A.— Yes. A European directive requires listing final prices, including taxes, supposedly to improve rational decision‑making. But it hides that a large portion goes to the state. “VAT included” simplifies shopping but weakens awareness of what the state really costs us.

Q.— Housing is another area of contradiction.
A.— Indeed. We want to live in city centers but block construction. We preserve private buildings at great cost, keep underused public ones “public,” oppose height, and tax transactions more than ownership—reducing supply.

Q.— Rental regulation fares no better.
A.— Contracts often have a weaker and stronger party, and we instinctively side with the weak. We oppose evictions, but shifting social policy onto landlords harms future tenants: landlords withdraw properties or reject riskier tenants.

Q.— Short‑term relief, long‑term harm.
A.— Exactly. You cannot conduct social policy through private law. Voters demand well‑meaning but destructive laws. Rent freezes in the 1980s left buildings in limbo: nominal owners, privileged tenants—and neglected property.

Q.— The Boyer decree tried to fix this.
A.— Briefly. Catalonia fought it; later the 1994 Urban Leases Act reversed it. Pandemic‑era restrictions (eviction suspensions, extensions, caps) were “temporary” but persist—just like the 1920 Bugallal decree meant to last 18 months but lasted until 1985.

Q.— You argue that Spaniards suffer from “normative idealism.”
A.— Yes. Many think everything can be fixed with political will. But law sets the framework; it does not dictate outcomes. Spain’s five‑year minimum rental terms illustrate this: meant to protect tenants, they increase landlord risk, who then charge more or screen tenants. Calls to cap “abuses” follow, creating regulatory spirals that shrink the market.

Q.— Let’s turn to education.
A.— A topic close to my heart. Education enabled my family’s mobility. Now it often functions more as consumption than investment. Pedagogical reforms abolished evaluation; we disdain memory despite cognitive science. International assessments show Spanish university graduates performing below Northern European high‑school graduates.

Q.— Millennials believe they are the best‑prepared generation.
A.— A myth. High youth unemployment coexists with labor shortages. Degrees do not equal skills.

Q.— Is education worse today?
A.— Hard to measure conclusively, but likely worse in many respects.

Q.— If institutions reflect citizens, then citizens must change.
A.— Political reform alone won’t fix things. I don’t seek to change anyone’s preferences—prioritizing tenants or debtors is legitimate. I only want decisions made with full awareness of costs.

Q.— Is it a question of education?
A.— Some education helps, but we cannot rely on it. Educators and journalists have biases. Competition in education and information is limited by regulation and private monopolies. Besides, politics yields little individual benefit—rational ignorance prevails. We follow friends and vote for people like us. The key is designing mechanisms that reveal costs automatically. Taxes are a perfect example.

Q.— What do you mean?
A.— Consider homeowners’ associations. Scandals happen, yet no one keeps voting for a corrupt president. In politics, we only punish the opposing side. Studies confirm this. We are far more forgiving of corruption in our own party.

Q.— Why?
A.— Because we do not feel defrauded money is ours. Hence the need to make fiscal costs more visible.

Q.— You propose eliminating payroll tax withholding.
A.— In Switzerland and Hong Kong, taxpayers pay the full amount at year‑end. Here, withholding is painless and invisible; most refunds come “with money back.” A simple reform: two lines on every payslip—gross income and taxes paid. Another: adjust withholding so almost everyone pays something in June. That would raise awareness of welfare‑state costs. Employees often do not know they bear the employer’s social‑security contribution; the self‑employed certainly do, which is why they protest more.

Q.— Your book ends on a positive note, citing sports champions.
A.— Their success shows that stable, impartial rules foster certainty and investment. Parents willingly impose demanding training regimes when they trust the system. Where stability and fairness exist, citizens strive.

Q.— Sports are pure meritocracy.
A.— Not perfect, but they show that competition works when rules are stable and clear. Only then can it be productive and fair.

English version prepared with ChatGPT-5.1