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Monday, August 11, 2014

Paul Krugman: Phosphorus and Freedom

Markets are not always magic:

Phosphorus and Freedom, by Paul Krugman, Commentary, NY Times: In the latest Times Magazine, Robert Draper profiled youngish libertarians ... and asked whether we might be heading for a “libertarian moment.” Well, probably not. Polling suggests that young Americans tend, if anything, to be more supportive of the case for a bigger government than their elders. But I’d like to ask a different question: Is libertarian economics at all realistic?
The answer is no. And the reason can be summed up in one word: phosphorus.
As you’ve probably heard,... Toledo recently warned its residents not to drink the water. Why? Contamination from toxic algae blooms in Lake Erie, largely caused by the runoff of phosphorus from farms.
When I read about that, it rang a bell. Last week many Republican heavy hitters spoke at a conference sponsored by the blog Red State... A few years back ... Erick Erickson, the blog’s founder ... suggested that oppressive government regulation had reached the point where citizens might want to “march down to their state legislator’s house, pull him outside, and beat him to a bloody pulp.” And the source of his rage? A ban on phosphates in dishwasher detergent. After all, why would government officials want to do such a thing? ...
Smart libertarians have always realized that there are problems free markets alone can’t solve — but their alternatives to government tend to be implausible. ...
More commonly, self-proclaimed libertarians deal with the problem of market failure both by pretending that it doesn’t happen and by imagining government as much worse than it really is. ...
Libertarians also ... don’t want to believe that there are problems whose solution requires government action, so they tend to assume that others similarly engage in motivated reasoning to serve their political agenda... Paul Ryan ... doesn’t just think we’re living out the plot of “Atlas Shrugged”; he asserts that all the fuss over climate change is just “an excuse to grow government.”
As I said at the beginning, you shouldn’t believe talk of a rising libertarian tide..., real power on the right still rests with the traditional alliance between plutocrats and preachers. But libertarian visions of an unregulated economy do play a significant role in political debate, so it’s important to understand that these visions are mirages. Of course some government interventions are unnecessary and unwise. But the idea that we have a vastly bigger and more intrusive government than we need is a foolish fantasy.

    Posted by on Monday, August 11, 2014 at 12:24 AM in Economics, Market Failure | Permalink  Comments (111)

          


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