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Bonus Quotation of the Day…

… is from pages 74-75 of the May 9th, 2020, draft of the important forthcoming monograph from Deirdre McCloskey and Alberto Mingardi, The Illiberal and Anti-Entrepreneurial State of Mariana Mazzucato:

Politicians and policy makers insistently raise the alarm. They say that they are fixing those grievous imperfections caused by natural liberty, fixing the “problems” that every generation of politicians discerns anew. (The vocabulary of social “problems,” and their solution with “policies,” by the way, grew up in the 19th century along with New Liberalism and socialism.) Yet we wonder how the politicians and policy makers discern the problems, and opportunities, and how they know in the longer view better than stock markets specialized in making such judgments, and risking personal wealth in making them? Why would someone with no skin the game do better than people who have plenty of such skin, being holders of stock in a market in which hour by hour the future is forecasted? We wonder.

DBx: I, too, wonder. Protectionists and industrial-policy advocates talk blithely and incessantly about using government coercion to arrange for this happier outcome and to prevent that deviation from an imagined ideal. But never, ever do they reveal just how government officials will acquire the information necessary to outperform competitive market processes.


Of course, protectionists and industrial-policy advocates are careful never to use the word “coercion.” Doing so would raise alarms about the true nature of their project. They wish to pass off their schemes as gentle assistance offered by the intelligent, noble, and wise few to the stupid, grasping, and imprudent many. In fact, protectionists and industrial-policy advocates get defensive when someone, such as Mike Munger, pulls back the curtain to expose the reality of their schemes. But this reality – the reality that behind every tariff and every subsidy are loaded, pointed guns operated at the command of flesh-and-blood human beings – cannot, in the end, be plausibly denied.