Government intervention

[Herbert Gintis <gintis@xxxxxxxxxxxxxxx>]

Eric Nilsson writes:
>Herb G. writes:
>
>        "More recently, the ge model gave us nonconvexities, missing
>        markets, and externalities, all of which are bases for policy
>        interventions."
>
>This is certainly true.  And, furthermore, the mainstream freely admits it.
>
>However, arguments in the mainstream against policy intervention are now
>based on other arguments: 1) the government cannot have adequate information
>to actually perform an optimal policy intervention and, so, government
>intervention will likely make things even worse; and, 2) rent seeking
>behavior implies that even if the government did have adequate information,
>self-interested political/economic actors would guide government policy so
>that it benefitted them personally (instead of welfare of the "nation").

	Do you think these are poor arguments? I think they are very
good arguments, not against gov't intervention in general, but against
the traditional notion that the government maximizes social welfare. I
hope you are not suggesting that we should ignore these arguments? I
don't. The fact is that no successful economy operates without market
competition and without government intervention, and both market
failures and government failures (rent seeking and other forms of
non-accountability) are serious impediments to attaining economic
goals. No?

Herb gintis@xxxxxxxxxxxxxxx