Quotation of the Day…

by Don Boudreaux on June 15, 2022

in Crony Capitalism, Reality Is Not Optional, Virginia Political Economy

… is from page 6 of the June 2022 typescript of Deirdre McCloskey’s paper, forthcoming in the Erasmus Journal, “Most Policy is Impossible”:

Industrial policy has propped up failing industries from Japan to France, such as small-scale retailing, instead of choosing winners who actually win. Regulation of dismissal has led to high unemployment, once in Germany and Denmark, and especially still in South Africa. In the 1960s the public-housing high-rises in the West inspired by Le Corbusier condemned the poor in Rome and Paris and Chicago to holding pens. In the 1970s, the full-scale socialism of the East ruined the environment. In the 2000s, the ‘millennial collectivists,’ whether Red, Green, or Communitarian, opposed a globalization that helps the poor but threatens trade union officials, crony capitalists, and the careers of people in Western non-governmental organizations.

Thus policy.

DBx: Pictured above are French farmers during one of their countless protests – this one in 2015 – to insist that government protect them from competition.

…..

Even if, contrary to fact, government could obtain enough of the detailed knowledge necessary for it to improve the economy by supplementing and overriding market forces, this ugly reality remains inescapable: A government given the power to so supplement and override market forces will in fact use that power to appease special-interest groups.

Many of these special-interest groups will be driven by narrow, material rent-seeking motives (see, for example the economically informed but greedy French farmers pictured above); many other of these special-interest groups will be driven by sincerely held but nonetheless destructive ideological convictions (see, for example, the economically uninformed but well-meaning conservatives and Progressives who today plead for industrial policy). All of these special-interest groups will ensure that any government power to supplement and override market forces will be used in ways that promote the goals of the special-interest groups at the larger expense of the general public.

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