Saturday, March 03, 2018

Left and right confusion

One wishes that good economics makes good politics but every time politicians reach for protectionist policies, it becomes clear that this is not to be. Short term advantage matters most. The long term damage of economic meddling is nobody's business.

Capitalism means different things to different people. Baumol, Litan and Schramm attempt to explain Good Capitalism, Bad Capitalism. The one we seem to be stuck with is bad crony capitalism. The cronies in politics and in business are always in play and have to be constrained. How? The hope was that with enough education, the fundamental truth that we become prosperous via comparative advantage (clear from logic and history) would matter but these profound lessons have not sunk in. Don Boudreaux at Cafe Hayek hammers at the essentials almost daily.

At the Fox Business Channel, the other day Stuart Varney carefully explained to his colleagues that Trump was for "free, fair and smart" trade. The fact that it is meaningless rhetoric in the service of nothing but crony capitalism dawned on no one in the room. Pro-business and pro-market are not the same. But the confusion goes way beyond Trump and Varney. I fear that it is widely share on the left as well as the right.