Not government spending or economic planning, writes economist Ben Powell here. Specifically, he’s responding to policy moves in Arizona that politicians say will help boost that state’s economy just as the government in Ireland has. Powell observes, however, that the reasons for the success of Ireland since 1990 have nothing to do with government — except insofar as the government got out of the way of the free market by cutting taxes and expenditure.
Politicians, whether in Arizona, North Carolina, or elsewhere, like to claim credit for any good economic news, but it’s harder for them to take credit if all they did was to clean away some of the governmental obstructions to the working of capitalism. Like Mike Easley, most would rather have a media event about some company they managed to lure in with subsidies than thousands of little investments all over that actually do much more to enhance prosperity.
