Re: sinners and saints

Replying to: Sinners and Saints

The accusation that market proponents are 'religious' is a non-argument which is, sadly, apparently somewhat persuasive to the sufficiently gullible. But setting that aside, I find it unsettling that economists are often leading the charge against markets and freedom. Here are some possible explanations of it.

  1. The case for markets is not really all that strong.
  2. It is strong, but people are managing to get degreed in economics without actually getting it.
  3. There is such a strong anti-market bias in people that years of study is not enough to cure them of it.
  4. The economics profession has relatively little salable value except as avisors to the state, and therefore the profession itself can never completely cure itself of a self-interested statist bias. Selection at work: economists who tell the state to go to hell are replaced with economists with something more "interesting" to say.
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It's #1

It's no 1. Anyone who studied seriously what it means for markets to work, limiting cases and so on, will testify. Once you go beyond the verbal, hand-waving, loose arguments, and start getting precise about against which objectives you're measuring markets, it all gets very ambiguous.

There are good arguments both in favor of more regulation and good arguments against it. More often than not, it turns out to be an empirical/contextual issue.

The only way in which you can declare free market perfect, a priori, is if you pick a criteria that's very convenient and otherwise completely uninteresting for non-libertarians.

On the other hand, once you reject both extremes (market suck, politicians are perfect) and (market are perfect, politicians are criminals) then your objective, as formulated in your model, will push you towards a mixed view which will unavoidably depend on circumstances.

(FYI, this is coming from a "fellow traveler" of anarcho-capitalists.)

You seem to equate

You seem to equate regulation with coercive political regulation, but most markets are self regulated, i.e. they will produce efficient contractual rules. Market "failures" cases generally do not account for this self-regulation.

Yes and No

Yes, but in the same interview, just in the previous paragraph, he says that...

I argued that the most probable explanation was that the government now operates on such a massive scale that it had reached the stage of what economists call negative marginal returns. Anything additional it does, it messes up. But that doesn't mean that if we reduce the size of government considerably, we wouldn't find then that there were some activities it did well.

So maybe, in the context of this discussion, it's a matter of a change in the focus/structure of regulation.

Coase versus evidence

The evidence he mentions unambiguously favors free markets over regulation. Coase is reluctant to accept that the result can be generalized, but he offers here no good reason to go along with him in that. In contrast, assuming that he is not lying about the evidence, he offers good reason to favor free markets over regulation.