Saturday’s Wall Street Journal had a letter from an economics professor that clearly and simply stated a crucial truth: the more we rely on political decision-making, the worse off we’ll be. Here’s the letter:
As the ratio of decisions governed by politics to decisions governed by economics rises, efficiency and therefore output per person rises more slowly than otherwise, and perhaps even falls.
The irony is that when a rich society has a downturn, people who don’t understand market economics (which, surprisingly, includes many economists) conjecture that more decision-making needs to come under government control. This drives up the aforementioned ratio, leading to subsequent calls for government intervention, and so on. This endless cycle of ratcheting up government control of economic activity is the core of the problem. The rest is detail.
Prof. David C. Rose
Univ. of Missouri-St. Louis
