Tyler Cowen gave a talk; Arnold Kling condensed. Amongst the condensation can be found this tender droplet:
“Markets always fail.”
Arnold qualifies that statement with:
“Point 3 says not to assume that markets are close to perfect or that they need only a few tweaks to make them perfect. Again, appreciate markets when they work, but don’t assume that markets working is the default. Of course, don’t assume that government works well, either.”
“Markets always fail?”
I thought one of the principle tenets of Masonomics was “Lose the ‘We’“. The word “markets” is another version of “we”. Governments don’t decide to regulate markets or start wars. People make those decisions. Likewise, markets don’t decide whether one good is worth exchange for another. People make those decisions too.
Maybe that’s quibbling. I don’t think so. I don’t think it’s quibbling to believe our understanding of the world and ourselves so slapdash and patchwork as to make comprehension of the “we” of “markets” just this side of useless.
“Markets always fail” should be read: “There will always be someone, somewhere, who thinks there is a market that failed.”
I don’t believe markets are perfect. I don’t believe in markets. I want to be a good “masonomist” and “lose the we.” Looking for a market that does or doesn’t fail is like looking for a dragon that doesn’t burn down helpless villages. At what point in the search do the dragon hunters begin to suspect that something other than a massive flying lizard is causing all the destruction? Similarly, at what point do free market thinkers and advocates stop hunting for the failed market bogeyman and start tracing the human decisions that helped expectations outpace reality?