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October 2022

"Markets Fail . . . And Libertarianism Still Works"

Another simply terrific piece by Arnold Kling. He deftly takes apart what he labels "the straw-man argument against libertarianism". Key paragraph:

Instead, long ago I offered the aphorism “Markets fail. Use markets.” That is, I readily concede that the market economy is not at some theoretical optimum. The question is what will lead to improvement. I believe that government intervention will often make things worse. Meanwhile, entrepreneurial innovation and creative destruction tends to solve economic problems, including market failures.

See also Veronique de Rugy, "Markets Aren't Perfect, but Government Is Worse".

No serious free marketer believes that markets are perfect. We aren't utopians. Unfortunately, perfect markets and perfect competition are often the starting point of economic textbooks. This rosy starting point leads many to conclude that when conditions are less than perfect, the best course of action for a correction is government intervention. It's wrong.

Related: "Nirvana fallacy," coined by Harold Demsetz.

"The Dysfunction of Big Education"

"For the first time in recent memory, the state of America’s public-education system has emerged as a disruptive issue in a national election year."

Which raises a question. A story that has been told recently is that with remote learning during the pandemic parents got a good look at what instruction is like and they were unpleasantly surprised. My question: did these parents not talk to their kids, even a little, about what they were doing in school?