Government And Economics.

Part of the "Critiques of Libertarianism" site.

Last updated 07/06/10.

Libertarians tend to consider government a drain on the economy, when in actuality it is an active player in creating a more vigorous economy.


Libertarianism, Property & Harm.
Chapter 2 of James Boyle's unpublished "Net Total: Law, Politics and Property in Cyberspace". Thoroughly dismantles three libertarian approaches to the problem of harms: [common] law, natural rights, and property.
What Russia Teaches Us Now: How Weak States Threaten Freedom.
Stephen Holmes' EXCELLENT article in The American Prospect which addresses the fundamental error that prevents libertarians from understanding liberalism. Strong, ACCOUNTABLE government creates rights and fosters prosperity. The current Soviet Union exposes the lie of Atlas Shrugged.
Douglass North: Why Some Nations Can Sustain Growth
The necessity of government policy to generate strong growth.
Government for Modern Markets
It's time to rediscover the state, not as the central planner but as the provider of the framework that complex modern markets need to operate efficiently. If a country's citizens don't ask their government to be a responsible and pro-active partner in building a market economy, the best-intentioned reform initiatives will ultimately go wrong and the economy will stagnate. "Fair and efficient markets do not occur by accident," wrote economic development expert Dr. Robert Klitgaard, "they are the products of . . . intelligent laws and public policies and environments rich in information."
The American Antitrust Institute
A very new, independent watchdog organization interested in promoting increased competition through antitrust. Many topical articles on current antitrust developments and the justification for antitrust. Also has an excellent list of internet resources, including international sites, and a fine guide to the organizations dealing with antitrust issues on both sides.
Public Choice Theory Criticized - McChesney, Money for Nothing.
Albert Foer's American Antitrust Institute review summarizes Public Choice theory as presented in McChesney's book, and ends with a clear presentation of the conflict of this Public Choice theory with reality.
How Education Drove Taiwan's Economic Development
Flora Tien outlines how Taiwan's government set ambitious educational goals as an integral part of its economic strategy, paving the way for an economic miracle.
The Voluntary Provision of Public Goods
Cliff Landesman's Princeton doctoral dissertation discussing why voluntary provision would be expected to fail, ie. fall far below Pareto optimality. Especially for rational egoists (in chapter 2.)
Making Work Pay: The Impact of the 1996-97 Minimum Wage Increase (executive summary)
Making Work Pay: The Impact of the 1996-97 Minimum Wage Increase (press release)
An Economic Policy Institute study by Jared Bernstein and John Schmitt that details the fact that raising the minimum wage has not resulted in job losses, contrary to libertarian propaganda ranging from the World's Smallest Political Quiz to the Libertarian Party Platform.
The Chicago Acid Bath: The Impoverished Logic of "Law and Economics"
Jedediah S.Purdy's article in The American Prospect that takes Richard Epstein and Richard Posner to task for tautological and blinkered aspects of their field.
Economics, Academia, And Corporate Money In America: The 'Law And Economics' Movement
Judicial Seminars: Economics, Academia, And Corporate Money In America
Antitrust Law & Economics Review articles that describe the promotion of "Law And Economics" by overwhelming corporate funding to universities, departments, and individual academics, not to mention extensive lobbying of the judiciary. Explains fundamental ideas and flaws of the movement.
Antitrust Overview: Laissez-Faire, Monopoly, And Global Income Inequality; Law, Economics, History, And Politics Of Antitrust
An overview of the subjects of the Antitrust Law & Economics Review. Explains fundamental ideas and issues which disagree sharply with common libertarian arguments.
The Real Reasons for Antitrust
Tom Nadeau explains antitrust in terms of two "government interferences in the market": incorporation and intellectual property. Libertarians are faced with the dilemma of rejecting those, or accepting the validity of antitrust. One of the better Feature Articles from the Boycott Micro$oft site.
Did Gore invent the Internet?
Scott Rosenberg, of Salon, details the smear on Gore, and shows yet another example of how Gore and government do work, contrary to libertarian ideas that technology develops in a vacuum.
Welfare vs. Privatization: the Truth Starts Here
Ian Montgomerie's review of The Economics of the Welfare State by Nicholas Barr. Undercuts libertarian arguments about optimality of markets.
3 Problems of Libertarianism
Ryan Brooke illustrates some reasons why government should be involved in markets.
Labor Markets, Rationality, and Workers with Disabilities
Professor Michael Ashley Stein identifies major errors in law and economics arguments (exemplified by Richard Epstein's) criticizing Title I of the Americans With Disabilities Act. From the Berkeley Journal Of Employment And Labor Law.
Spheres of Affluence
Michael Lind's The American Prospect article points out ahistorical libertarian ideas on the benefits of free trade.
The Tradable Permits Approach to Protecting the Commons: What Have We Learned?
Tom Tietenberg provides an overview which shows how despite their market gloss, tradable permits are a sophisticated government program, and privatization in a very limited sense.
Laissez Not Fair
Paul Krugman's New York Times article uses Enron's fall and Argentina's collapsing economy as examples of why government activist policies are important for tasks such as preventing financial abuses and fighting recession. From The Unofficial Paul Krugman Archive.
Myth: The gold standard is a better monetary system.
Part of Steve Kangas' excellent Liberalism Resurgent: A Response to the Right. Gold standards return to bigger problems than they might prevent.
Human Capital Theory And Education Policy In Australia
John Quiggan's academic paper that explains why high public spending on education is economically sensible. Technical.
Globalization and economic sovereignty
John Quiggan rejects neoliberal claims of "inevitability", and presents historical and policy arguments limiting globalization.
Liberty! What Fallacies Are Committed in Thy Name!
Cosma Shalizi points out that libertarian-style arguments about eliminating antitrust have severe empirical difficulties: ie. price fixing is rampant in the global marketplace.
Cycles of Conventional Wisdom on Economic Development (pdf)
Paul Krugman points out that the association between free trade and economic development is not supported by economic research, and in fact is a recent, spurious belief.
NEW 2/06: Goodbye Washington Consensus, Hello Washington Confusion?
Dani Rodrik, of Harvard University, points out that the neoliberal prescription of free markets, privatization, and non-interference has been a great failure for developing nations. India and China have done vastly better with their own prescriptions.
NEW 5/06: No Longer Getting By: An Increase in the Minimum Wage Is Long Overdue
Amy Chasanov's Economic Policy Institute briefing paper explains why minimum wages are a good idea and refutes the usual conservative/libertarian arguments against them.
NEW 10/06: The Social Welfare State, beyond Ideology
Jeffry Sachs' Scientific American article on how social welfare states do as well as or better than low-tax, high-income countries. The punch line is that Friedrich Von Hayek was wrong.
NEW 2/07: Markets Are Not Magic
Mark Thoma, at Economist's View, explains when markets can perform very badly, and how the belief that "privatization and deregulation are always best" is wrong.
NEW 2/08: What Makes a Miracle: Some myths about the rise of China and India
Pranab Bardhan's Boston Review article debunks claims that China and India's economic development is solely due to capitalism: communism, democracy and socialism have also played major parts.
NEW 7/10: Regulation and the Theory of Market and Government Failure
Nobel Prize winner (economics) Joseph Stiglitz explains that government can improve economic efficiency because real markets don't have the properties of ideal markets. Technical, but not mathematical.

Print References

The links here are to, through their associates program, primarily because of the review information. Books without links are generally out of print, and can often be easily found at AddAll Used and Out Of Print Search. Good sites for bargain shopping for sometimes expensive new books are Online Bookstore Price Comparison and AddAll Book Search and Price Comparison. Both of those list applicable coupons. Another is

Walter Adams "The Bigness Complex"
Pantheon Books, 1987. (opposes libertarian antitrust position)
A. B. Atkinson "The Economic Consequences of Rolling Back the Welfare State"
MIT Press, 1999. Points out unintended negative side effects of reduction of government.
Nicholas Barr "The Economics of the Welfare State"
Stanford University Press, 1999. A thorough overview of the real world economics of market failures and government interventions. Click here for a review.
Frank Bourgin "The Great Challenge: The Myth of Laissez-Faire in the Early Republic"
David Card and Alan B. Krueger "Myth and Measurement: The New Economics Of The Minimum Wage"
Princeton Univ. Press, 1997. Libertarians claim the minimum wage destroys jobs: real-world evidence points the other way.
George W. Downs and Patrick D. Larkey "The Search For Government Efficiency: From Hubris to Helplessness"
Random House, 1986. A serious, scholarly study of efficiency. Not a polemic but very necessary to balance the government as inefficient polemics.
Charles T. Goodsell "The Case for Bureaucracy: A Public Administration Polemic"
Chatham House, 1994. Reexamines empirical findings on U.S. bureaucratic performance, noting how well the American system really works.
John Gray "Beyond the New Right: Markets, Government and the Common Environment"
Routledge 1994. John Gray once held views very close to libertarianism, but in this book he repudiates both neoclassical liberalism and libertarianism. Chapter 3, "The Moral Foundations of Market Institutions" contains some strong criticisms of the libertarian position.
Donald P. Green "Pathologies of Rational Choice Theory"
Yale University Press, 1994. A serious, scholarly study of the intellectual failures of Rational Choice Theory.
Thomas Parke Hughes "Rescuing Prometheus"
Pantheon Books 1998. An analysis of how four large-scale government projects basically invented and then transformed modern systems management and operations research while also developing much of the core technology of the post-modern world.
Jane Kelsey "Rolling Back the State: Privatisation of Power in Aotearoa/New Zealand"
Paul & Co Publishing Consortium 1996. And "Economic Fundamentalism: The New Zealand Experiment - A World Model for Structural Adjustment?"
Pluto Press 1996. Two books that detail the unhappy consequences of a real-world libertarian economic experiment.
Robert Kuttner "Everything for Sale: The Virtues and Limits of Markets"
Knopf, 1997. Why mixed economies would outperform pure markets. Essential for countering libertarian economic arguments.
William Leach "Land of Desire"
Vintage Books, 1993. Discusses the rise of America's consumerist culture and shows how our capitalist system has depended on government support at every stage of its development.
Lawrence Lessig "Code: And Other Laws of Cyberspace"
Basic Books, 1999. A non-libertarian view of the threats to freedom in cyberspace both from government and the market. Makes the point that freedom comes from a particular kind of government, not no government.
Charles E. Lindblom "The Market System: What It Is, How It Works, and What To Make of It"
Yale Univ. Pr. 2001. The big picture of what markets do well and poorly, their benefits and harms. Very balanced.
William J. Novak "The People's Welfare: Law and Regulation in Nineteenth-Century America"
Univ. of North Carolina Pr., 1996. "Blasts to pieces... the libertarian fantasy that until the twentieth century the American state left private property owners and economic entrepreneurs alone." --Robert W. Gordon, Yale Law School.
Elton Rayack "Not So Free To Choose"
An extensive criticism of Milton Friedman's economic and social philosophy.
Amartya Sen "Development As Freedom"
A Nobel prize-winning economist explains elimination of "capability deprivation" in five categories as being crucial to freedom. Shows libertarian ideas of economic freedom to be dreadfully incomplete for liberty or freedom.
Cass Sunstein "Free Markets and Social Justice"
(Oxford Univ. Press 1997). Takes on the claims of the Law and Economics camp, libertarians such as Epstein and Posner.
Rick Tilman "Ideology and Utopia in the Social Philosophy of the Libertarian Economists (Contributions in Economics and Economic History, No. 223)"
(Greenwood Publishing Group 2001). Challenges libertarian definitions of freedom and democracy, and shows how libertarianism undermines democracy, civil liberties, and social equality.
Lars Udehn "The Limits of Public Choice: A sociological critique of the economic theory of politics"
(Routledge 1996).
Donald A. Wittman "The Myth of Democratic Failure: Why Political Institutions Are Efficient"
University of Chicago Press, 1995. "... refutes one of the cornerstone beliefs of economics and political science: that economic markets are more efficient than the processes and institutions of democratic government."

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Copyright 2007 by Mike Huben ( ).
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