Quotation of the Day…

by Don Boudreaux on January 21, 2013

in Economics, Reality Is Not Optional, Seen and Unseen

… is from page 10 of the original edition of Gordon Tullock’s superb 1976 public-choice primer, The Vote Motive (original emphasis; footnote omitted):

The number of cases where economists have argued that the market is imperfect and therefore recommended that government should deal with the problem is very large.  The British economist A.C. Pigou and the American Professor Paul Samuelson both made this error.  They assumed that government reaches a perfect solution.  No one really believes this, but economists frequently recommend government action simply because the private market creates externalities, and hence is not likely to function perfectly.

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