Friday, September 02, 2011

Treat Govt Failures Like Market Failures

Jonathan Adler makes a great point today on the Volokh Conspiracy. Writing on the fact that every time markets crash (leaving out the fact that said crashes, as in the case of the mortgage crisis often occur because of, not in spite of, government regulations)he opines,
Indeed, when many policymakers see a potential market failure, they almost inevitably call for government intervention to restrain market excesses. Yet when government fails, interestingly enough, the proposed policy solution is often the same: more government intervention. The point here is not that government intervention is never justified — Becker himself believes some government regulations are “essential” — but that it must be justified with serious comparative analysis considers the possibility government may fail as well.

Translation: Why don't we the people treat government failures that same way government likes to treat 'market failures'? Seems to me it is because the market failures are often - perhaps even usually - caused by government in the first place. And government likes this model, as it usually leads to more power for the same organizations that caused the problem! As Rahm Emmanuel famously let slip "Never let a serious crisis go to waste".

I think it is high time we used government failures to strip power from government. Private enterprise is not perfect, but it has a far better track record than government does. One of the many reasons why no command economy has ever succeeded.

Hat tip to Glenn Reynolds.

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