The classically liberal answer is to make government less powerful. The monstrous offspring of entangled markets and states can be defeated only by the most thorough possible separation. But public self-protection through market-state divorce can work only if libertarians are right that unfettered markets are not by nature unstable, that they do not lead to opressive concentrations of power, that we would do better without a central bank, and so on. Most of us don't believe that. Until more of us do, we're not going far in that direction. And maybe that's just as well. Maybe it's true that markets hum along smoothly only with relatively active government intervention and it's also true that relatively active government intervention is eventually inevitably co-opted, exacerbating rather than mitigating capitalism's injustices. Perhaps the best we can hope ever to achieve is a fleeting state of grace when fundamentally unstable forces are temporarily held in balance by an evanescent combination of complementary cultural currents. This is increasingly my fear: that there is no principled alternative to muddling through; that every ideologue's op-ed is wrong, except the ones serendipitously right. But muddle we must.
Thursday, December 23, 2010
In an effort to reintroduce myself to blogging after my long absence (because I was busily completing my thesis!) I thought I would briefly comment on a Will Wilkinson piece from last week. In discussing the inevitability of regulatory capture in the specific case of financial regulator Peter Orszag accepting a gold-plated private sector finance position, he writes: