Eric Posner Rebuts Economists' Argument Against Government Correcting Market Failures

COVID and the Conservative Economic Crack-up

A recent commentary in the Wall Street Journal exposes the dark hole into which conservative economic thinking has sunk since the pinnacle of its influence in the 1980s. Economists Casey B. Mulligan and Tomas J. Philipson of the University of Chicago, both of whom served in Donald Trump’s administration, have used the COVID-19 pandemic to make the case for abandoning what they see as the conventional wisdom among economists: “that the purpose of government policy is to correct market failures.”

Turning this dictum on its head, they argue that “government policy fails much more frequently” than markets do, and that markets correct government policy by rescuing citizens from the terrible decisions that governments routinely make. It thus follows that the COVID-19 pandemic was the result of government policy. Either the virus escaped from a Wuhan laboratory that had received US government funding, or it spread because Chinese authorities failed to inform the world in time, and because the US government flipflopped on its messaging about face masks and lockdowns.

Mulligan and Philipson then argue that it was private enterprise that “quickly controlled” the pandemic (all thanks to Trump, of course), even though the virus is still running rampant. “Getting the government out of the way was essential,” they write. That was “the goal of President Trump’s Operation Warp Speed.”

Read more at Project Syndicate

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