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NEW ESSAY from @Lindsey_Brink: The flawed ideology of the free-market movement is the belief that a “free-market” will be successful when it’s completely unregulated.
Free-markets need government regulation to thrive. 1/ https://www.niskanencenter.org/free-markets-and-limited-government-reconceived/
Free-markets need government regulation to thrive. 1/ https://www.niskanencenter.org/free-markets-and-limited-government-reconceived/
A well-functioning market system is neither self-executing nor self-sustaining. “To achieve what they are capable of, markets need to be embedded in and supplemented by supportive legal, political and social institutions,” writes @Lindsey_Brink. 2/
Today, the world’s richest and most advanced economies belong to countries with large, powerful states with elaborate regulatory codes and extensive provision of social insurance and other public goods. 3/
If modern markets were to be truly self-sustaining, we would see flourishing market economies in the world’s most lightly governed places.
And this is just not the case. 4/ https://www.niskanencenter.org/quality-government-not-size-key-freedom-prosperity/
And this is just not the case. 4/ https://www.niskanencenter.org/quality-government-not-size-key-freedom-prosperity/
“A flourishing market economy requires, not small government, but high-quality government,” @Lindsey_Brink explains. https://www.niskanencenter.org/freedom-government-part-one/
And as @Dolanecon has found, there is a positive correlation between size of government and economic freedom/wellbeing. (The opposite of what you would expect if you think that “big government” is the enemy of markets.) 5/
And @hamandcheese has long argued that absent protections like social insurance, economic shocks can have lasting negative effects on political institutions. Economic freedom requires fostering and protection. 6/ https://www.niskanencenter.org/the-free-market-welfare-state-preserving-dynamism-in-a-volatile-world/
Because the association between free markets and ‘deregulation’ has been broken, it is easier to see that regulations that are effective in preventing harms to workers, consumers, third parties, or the environment are actually pro-market. 7/
A free market is not a completely deregulated market. Markets are free when the regulations put into place allow free entry, free exit, freely moving prices, free trade across borders, freedom to hire and fire, freedom to invest, etc. 8/
Good government protects the market against special interests. It’s not the champion of big business; it’s the champion of opportunity and fairness for all. 9/
Once policymakers are freed from the false dilemma of small v. large govt, they can focus their attention on what actually serves the public interest. Checks and balances placed on govt through our constitutional system and democratic institutions ensure accountability. 10/
Today’s Republicans, unfortunately, have let the idea of small government completely distract them from good, effective government. 11/
The founding generation of Republicans were strong proponents of energetic, effective government. As industrialization took off, Republicans became the party of big business, “a partnership that led in some good directions and a number of bad ones.” 12/ https://www.niskanencenter.org/when-republicans-were-republican/
An American center-right that abandoned its misguided attachment to small government for small government’s sake (and focused on effective government instead) would look very different from the right we have today. 13/ https://www.niskanencenter.org/the-center-can-hold-public-policy-for-an-age-of-extremes/
This would better reflect the rich historical tradition within the Republican Party where being anti-government was not the goal. Public service would be seen as a high calling and corruption would be condemned as betrayal. 14/
As @lindsey_brink concludes, “American politics badly needs a decent, constructive center-right, and that among its necessary elements are a sound understanding of and firm commitment to free markets and limited government.” 15/
But it's time we all acknowledged that small government as a goal in and of itself is proving to be a dead end that has failed Americans in a time of crisis. 16/16 https://www.niskanencenter.org/the-dead-end-of-small-government/
