Sheldon Richman has an excellent article today exploring the long-standing relationship between rent seekers and politicians in America. (By “rent seekers,” he means those who turn to government to make more money.) He observes that while most people regard the New Deal as the beginning of widespread governmental intervention in the economy, it goes back to the earliest days of the nation. Some of the most disastrous actions were taken during the supposed heyday of laissez-faire in the late 1800s.
Sheldon asks exactly the right question — how much better off would the United States be today if in fact we had followed laissez-faire policies consistently? I think the answer is “considerably.” We don’t know how much wealth creation and innovation has been prevented by the waste and folly of government, but my guess is that it’s on the order of 50 years. That is, if we could return to living standards of 1957, the difference between that and what we enjoy today is about the difference between the way we live now and the way we would be living if it had not been for all the governmental mandates and prohibitions that have been gumming up the works.
