Capitalism = Government Intervention

OK, that may be an overstatement. When I was in graduate school, I was a “reader” (meaning I graded exams) for a course on recent US history taught by Richard Abrams. What I took away from that course was that virtually all government intervention in or regulation of the economy was done at the request of some part of the business community – most often entrenched incumbents lobbying the government for protection from new entrants.

Colleen Dunlavy of the University of Wisconsin has a blog post about the history of government intervention in the economy. Most critics of government intervention take one or both of two positions: (a) it doesn’t work or (b) it’s un-American (read: socialist). Dunlavy pretty much destroys argument (b) and, along the way, gets in some blows to argument (a). It’s useful reading as we head into a season of expanded government intervention and regulation in the financial sector.

2 thoughts on “Capitalism = Government Intervention

  1. Government interventionism started with John Maynard Keynes. He pushed forward an agenda which basically said that “markets cannot be understood, but we can try to push them into stability”. This was a feeble attempt at explaining economics, unfortunately the world stuck with it. It also lead to the massive amount of counterproductive efforts like preventing competition, granting special treatment for some actors within the market, and worst of all – inflation. If you are interested in why it doesn’t work, and why the market keeps looking like a rollercoaster, read Mises or Riesman. If you are interested in why it is morally wrong, read Ayn Rand.

    Save capitalism

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