|
Don Boudreaux, head of the George Mason University econ department (and member of the IPCentral.Info Academic Advisory Council) has a fine explanation of the thinking that underlies this mantra, used so often by PFFers among others, in A Simple Rule for a Complex World.
Read the whole thing, but here are a couple of samples:
Saying "Let the market handle it" is to reject a one-size-fits-all, centralized rule of experts. It is to endorse an unfathomably complex arrangement for dealing with the issue at hand. Recommending the market over government intervention is to recognize that neither he who recommends the market nor anyone else possesses sufficient information and knowledge to determine, or even to foresee, what particular methods are best for dealing with the problem.
To recommend the market, in fact, is to recommend letting millions of creative people, each with different perspectives and different bits of knowledge and insights, each voluntarily contribute his own ideas and efforts toward dealing with the problem. It is to recommend not a single solution but, instead, a decentralized process that calls forth many competing experiments and, then, discovers the solutions that work best under the circumstances. And:
While declaring "Let the government handle it" comes across as a solution, it's no such thing. Instead, it is merely a sign of a simple and baseless faith -- a simple and baseless faith that people invested with power will not abuse it; that political appointees possess or will find better answers than will millions of people pursuing solutions in their own ways, and staking their own resources and reputations on their efforts; that only those 'solutions' that are spelled out in statutes and regulations and that have officials paid to implement them are true solutions.
So yes, show me a problem and I'll likely respond "Let the market handle it." I'll respond this way because I know that not only is my own meager knowledge and effort never up to the task of solving big problems but that not even the Einsteins or Krugmans or Bushes amongst us can know the best solution to any social problem.
Solutions to complex social problems require as many creative minds as possible -- and this is precisely what the market delivers.
posted by James DeLong @ 11:18 AM | Markets: Business, Investment & Innovation
Link to this Entry |
Printer-Friendly |
Email a Comment | Post a Comment(0)
|
