Cafe Hayek — where orders emerge: "Implicitly, this methodology treats the political process as if it is a corrective device available to impose ideal social outcomes, something like a pinch hitter that always delivers the game-winning hit. But this is a fantasy. A choice between the real world of markets and the hypothetical ideal of government intervention is not an option. Instead, the choice is always about how markets work compared to the alternatives. Put another way, the relevant choice is always between the real-world operation of markets and the real-world operation of the political process."
'via Blog this'
2 comments:
"the relevant choice is always between the real-world operation of markets and the real-world operation of the political process"
This makes it sound like we often have the choice between completely unfettered free markets and utterly government-encumbered markets. Doesn't the real-world usually have some degree of both. And what about monopolies and collusion between companies (e.g. price fixing of TVs, e-books, etc.)?
He's acknowledging markets don't always do everything right, but that often what happens is that a person finds a flaw in the market and says we need government to correct the flaw, without analyzing whether government, as it actually functions, makes the problem any better.
In some respect I think your comment underscores his point. Monopoly is a real market failure. But do the DOJ and Anti-trust law make the problem better? Many economists, (including before his death Milton Friedman), believe that anti-trust has created a cottage industry of rent seeking lawyers and economists, but has not really helped consumers.
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