Sunday, July 07, 2013

To intervene or not to intervene?

That is the question.

At least it will be the question during my Fall 2013 course, Business, Government and Society. Inspired by the work of Steve Medema, I plan to cover five main reasons for government interventions in the economy. (I have added two to the three that I heard Steve list.) A famous spokesperson for each type of intervention will have their say, followed by a famous spokesperson arguing against the particular intervention, and finally we will look at a contemporary issue demonstrating that the debate is still live. (Here I plan To have students debate each side of the issue, using the arguments previously discussed.) Here, then, are my current ideas for the typology of interventions, the "pro" spokesman, the "anti" spokesperson, and the contemporary issue. (The readings will naturally be relevant excerpts from the entire works listed below, when the work is large.) I seek your advice as to how the below might be improved.

I. The Common Good
Pro: Plato, The Republic
Anti: J.S. Mill, On Liberty
Issue: Pornography

II. Economic Growth
Pro: Adam Smith, The Wealth of Nations
Anti: F.A. Hayek, "The Use of Knowledge in Society"
Issue: STEM education

III: Externalities
Pro: A.C. Pigou
Anti: Ronald Coase, "The Problem of Social Cost"
Issue: Global Warming

IV. Stability
Pro: Paul Krugman, "Baby-sitting the Economy"
Anti: Mises? Hayek? Lucas?
Issue: The Great Recession

V. Fairness
Pro: John Rawls, A Theory of Justice
Anti: Robert Nozick, Anarchy, State, and Utopia
Issue: Public health care


  1. Is there even such a thing as "an economy" without government intervention? I realize there can be acts of trade outside of the state system. But an actual system of nonviolent exchange? Even dealers in contraband have to plug unto the official - state-enabled - economy to enjoy the full fruit of their trade. Indeed, much of the last 30 years of the drug war has constituted the state trying to make that harder for them to do (e.g. transaction-reporting requirements).

    I know ancaps say such a thing could exist, but it seems like, in any case where the question, "Should [specific government] intervene in this way in this economy?" is meaningful, that economy is already enabled by that very government. So the real question is what kinds of interventions should a particular government make for what ends, isn't it?

    1. Jim, I am in total agreement with what you say above. But my aim In teaching this course Is to give every viewpoint its due; that means even ancaps!

    2. I hear you. And I'm not saying don't teach ancaps. ("Some of my best friends...") I'm just uncomfortable that the framing of the course itself concedes too much: by implication, there's a "the economy" exogenous to the state into which the state may or may not insert itself at specific points. As opposed to, there's a "the economy" and a "the state" that are conceptually distinct but intrinsically inseparable, and the question is what kind of weave are we after.

  2. Re: Fairness and intervention, I'd personally prefer de Jasay's The State.

    Another more recent book I'd consider is Jonathan Haidt's "The Righteous Mind", which discusses fairness as one of many modes of morality which liberalism tends to disproportionately stress.


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