Tuesday, December 30, 2008

Enemies of World Prosperity

In the current New York Review of Books, Princeton economist Paul Krugman explains the pressing necessity for government economic intervention. "Nothing could be worse," he tell us, "than failing to do what's necessary out of fear that acting to save the financial system is somehow 'socialist.'" He refers to relatively successful interventions in the economic crises of Sweden and Japan to prove his case. "I believe," concludes Krugman, "that the only important structural obstacles to world prosperity are the obsolete doctrines that clutter the minds of men."

Just what are these obsolete doctrines? We are not told. Certainly it can't be traditional conservative ideas about a free market, for to be for a free market in no way suggests one opposes all government regulation. This is of course a common cartoon of the conservative position, but something that surely a Nobel Prize winning economist such as Krugman would avoid. Take Yuval Levin writing in the National Review:
Fiscal conservatives are not opposed to government regulation of the financial markets, provided the goal is to help the market work and not to replace it. Social conservatives are not opposed to public assistance to the poor, provided its aims are to strengthen and grow families and not to replace them.
The overarching principles behind his position are what gives Levin's writing such acuity:
The market is our way of contending with permanent intellectual imperfection, and of channeling individual avarice toward common prosperity in a free society. Alternative ways of pursuing prosperity tend to fail because they fall back on two delusions: that we can know enough to govern the economy in every detail, and that a reallocation of resources can eradicate poverty.
Reasonable conservatives believe that limited government regulation is necessary, like an umpire who calls strikes or breaks up a fight, but doesn't pick up a player and carry him to first base. That said, whoever these ideologues are who are roadblocking world prosperity, I sure hope Krugman finds them. They sound like really bad guys.