Morning Must-Read: Robert Waldmann: Thoughts on Brad’s Thoughts on Economic Theology

Robert Waldmann: Thoughts on Brad’s Thoughts on Economic Theology: “So why is the Keynes-Friedman-Samuelson position unstable?…

…I definitely do not believe in the neoclassical synthesis…. I don’t think that, even given full employment, markets are efficient. I tend to advocate leaving the market alone except for 1) redistribution from rich to poor 2) mandatory insurance is market insurance is prevented by the adverse selection death spiral 3) Pigouvian taxes to internalize externalities 4) aggregate demand management 5) Anti discrimination legislation and 6) I’m sure there are lots of other exceptions which don’t come to mind…. The market is the worst possible way to organize economic interactions except for all of the others that have ever been invented. My inclination to leave markets along (except for 1-6) is based on mistrust of the state, not trust in markets… meddling will lead to interest-group gridlock, advantages for the well-connected (that is rich) captured regulators and so forth and so on…