Quotation of the Day…

by Don Boudreaux on October 23, 2011

in Economics, Environment, Myths and Fallacies, Other People's Money, Politics, Property Rights, Seen and Unseen

… is a twofer – a quotation within a quotation.  Below is from page 25 of Robert Higgs’s insightful 1991 Review of Austrian Economics article “Eighteen Problematic Propositions in the Analysis of the Growth of Government“; and the inner quotation is from Leland Yeager’s 1983 article “Is There a Bias Toward Overregulation?“:

The theory of government as a fixer of externalities is often quite backwards.  Governments themselves compose “the prototypical sector in which decision makers do not take accurate account of all the costs as well as benefits of each activity” (Yeager, 1983, p. 125).  In reality, the government is more likely to cause a negative externality than to reduce one.

Sadly, it is common for economists, proclaiming to scientifically follow only the objective dictates of the facts, to identify what they (can usually only at best) presume to be an externality and then conclude without much further consideration that the most hallowed principles of Economic Science counsel in favor of corrective government action.  Such sloppy analysis and jumping-to-conclusions are, of course, quite the opposite of science.


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