Tuesday, October 30, 2007

Political "Solutions": Socialism on Installment Plan?

From economist Thomas Sowell's op-ed Political "Solutions":

It is remarkable how many political "solutions" today are dealing with problems created by previous political "solutions." Three examples that come to mind immediately are the housing market crisis, the wildfires in southern California, and the water shortages in the west.

Sowell outlines a dangerous pattern:

1. Based on some perceived market failure, a political solution (regulation, subsidies, legislation, tariffs, price controls, property rights restrictions, below-market insurance programs, zoning laws, real estate regulations, etc.) is implemented to solve the "problem."

2. The political solution is inherently distortionary, introduces inefficiencies, and makes the original situation even worse.

3. Additional politcal solutions are then proposed to addresss the growing problems created by the previous political solutions.

Steps 1-3 continue to repeat, leading to the possibility of "socialism on the installment plan," or Hayek's concept of "The Road to Serfdom," because of the "fatal conceit" of policymakers.


At 10/30/2007 10:55 AM, Blogger TRE said...

The human DNA itself is a patch on a patch on a patch. It's the way evolution works. Politics is the same way. Every solution creates more problems, but that doesn't mean we ignore the original problems. The libertarian emptiness of targets and goals should not be our only goal--or lack thereof.

At 10/31/2007 12:27 PM, Anonymous Anonymous said...

"The human DNA itself is a patch on a patch on a patch."

Yes, but there is a "survival of the fittest" element involved with the evolution of DNA.


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