Wednesday, July 08, 2009

Quote of the Day: Underestimating Markets

Economists have an undeserved reputation for "religious faith" in markets. No one has done more than economists to dissect the innumerable ways that markets can fail. After all their investigations though, economists typically conclude that the man in the street - and the intellectual without economic training - underestimate how well markets work.

~Bryan Caplan in "The Myth of the Rational Voter"


At 7/09/2009 12:51 AM, Blogger Hot Sam said...

No matter how often markets fail, I'll take markets over Obama's "judgment to lead" any day of the week.

I've been forced to pay higher prices to monopolists. I've suffered through many externalities. I've been the victim of moral hazard and adverse selection. I've dealt with underprovision of public goods. I've thrown money away to people who had an information advantage over me.

But no market failure has ever screwed me over as badly or as often as leftist taxes, regulation, spending, incentives, programs and political control.

All my hard work in the past and all my hopes for the future have been mortgaged to this feted and festering sewer.

At 7/09/2009 9:25 AM, Blogger ExtremeHobo said...

I am a believer in freedom but not a believer in democracy.

At 7/09/2009 9:30 AM, Anonymous enoriverbend said...

@Robert Miller:

Nicely said, Robert, although I must add one thing. You mentioned "leftist taxes", but various politicians of the right have also been repeatedly acting as if the government can make better choices than the free market. (And that includes those who simultaneously pretend to a firm and unwavering belief in the free market.)

Both sides are perenially susceptible to that urge to "do something", without having the burden of proving that the something they do is better than nothing.

At 7/09/2009 10:51 AM, Blogger Unknown said...

You are correct that both political parties in the U.S. have behaved more liberally than conservatively of late. This is something that I hope gets more attention as we get closer to the next elections. Fiscally speaking, republicans and democrats are not very different from one another. If conservative fiscal policy is what people want they are going to have to speak up about it and look to a third-party.


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