To ignore evidence that exclusive reliance on market forces fails to maximize consumer welfare in the face of explicitly evidence to the contrary is to move from economics to political philosophy.

I’m not sure who you’re referring to specifically, so I’m not going to defend this in general, but it seems to me that your post went further than that. It’s one thing to complain that libertarian analysts are refusing to acknowledge evidence of market failure in industry X. In fact, I made precisely this point myself.

However, the fact that market forces produce an outcome that’s not as good as the best regulatory scheme we can imagine does not come anywhere close to proving that it’s worse than the regulatory regime we would actually get if the FCC or Congress decided to impose Carterfone and NN regulations on the wireless industry. The technological and regulatory environments have changed dramatically in the last four decades, and the issues that regulators would face are a lot more complex than those the FCC faced in 1968.

So our choice is not between the flawed markets we see in the real world and the ideal regulatory state you see in your head, any more than it’s between the flawed regulatory state that exists in reality and the idealized markets that some libertarians see in their heads. Both systems have their strengths and weaknesses, and it doesn’t make sense to jump to conclusions about which is better without knowing the details of how the regulatory scheme would work. And the mere fact that Wu has found some problems in the marketplace certainly does not demonstrate that any given regulatory scheme would be an improvement.

To ignore evidence that exclusive reliance on market forces fails to maximize consumer welfare in the face of explicitly evidence to the contrary is to move from economics to political philosophy.

I’m not sure who you’re referring to specifically, so I’m not going to defend this in general, but it seems to me that your post went further than that. It’s one thing to complain that libertarian analysts are refusing to acknowledge evidence of market failure in industry X. In fact, I made precisely this point myself.

However, the fact that market forces produce an outcome that’s not as good as the best regulatory scheme we can imagine does not come anywhere close to proving that it’s worse than the regulatory regime we would actually get if the FCC or Congress decided to impose Carterfone and NN regulations on the wireless industry. The technological and regulatory environments have changed dramatically in the last four decades, and the issues that regulators would face are a lot more complex than those the FCC faced in 1968.

So our choice is not between the flawed markets we see in the real world and the ideal regulatory state you see in your head, any more than it’s between the flawed regulatory state that exists in reality and the idealized markets that some libertarians see in their heads. Both systems have their strengths and weaknesses, and it doesn’t make sense to jump to conclusions about which is better without knowing the details of how the regulatory scheme would work. And the mere fact that Wu has found some problems in the marketplace certainly does not demonstrate that any given regulatory scheme would be an improvement.

To make clear (as I have tried to do in other posts): regulation is a tool of public policy. There are many tools of public policy. Market incentives are also a tool of public policy. It is a good tool, as far as it goes. So is regulation– for its purposes. Government subsidy is another tool: usefull for the appropriate job.

All these tools are useful where appropriate in somne cricumstances and absolutely destructive in others. A chain saw if great for cutting down trees and lousy for surgery. A scalpel is good for surgery and awful for cutting down trees.

Libertarians, as far as I can determine, regard reguation as an intrinsicly lousy tool for everything, and justify this by pointing to the places where it is used inappropriately. (My experience is that Libertarians, being human beings, also suffer from asymetric idealization.) Many also consider it impossible or unjustifiably arrogant for government to even imagine that it should set economic policy (beyond certain limited catagories such as protecting property rights).

It’s not an intrinically irrational view. But it carries costs. My frustration and associated mockery comes in with the refusal to acknowledge the associated costs and trade offs of the Libertarian philosophy v. a New Deal-type maximizing collective welfare philosophy which sees a considerable role for government policy.

The accompanyingsource of frustration is the belief that we are talking economics, rather than political philosophy. To claim that, as a general rule, relying on market forces maximizes consumer welfare if a defensible position — albeit one with which I disagree. But to ignore evidence that exclusive reliance on market forces fails to maximize consumer welfare in the face of explicitly evidence to the contrary is to move from economics to political philosophy.

To make clear (as I have tried to do in other posts): regulation is a tool of public policy. There are many tools of public policy. Market incentives are also a tool of public policy. It is a good tool, as far as it goes. So is regulation– for its purposes. Government subsidy is another tool: usefull for the appropriate job.

All these tools are useful where appropriate in somne cricumstances and absolutely destructive in others. A chain saw if great for cutting down trees and lousy for surgery. A scalpel is good for surgery and awful for cutting down trees.

Libertarians, as far as I can determine, regard reguation as an intrinsicly lousy tool for everything, and justify this by pointing to the places where it is used inappropriately. (My experience is that Libertarians, being human beings, also suffer from asymetric idealization.) Many also consider it impossible or unjustifiably arrogant for government to even imagine that it should set economic policy (beyond certain limited catagories such as protecting property rights).

It’s not an intrinically irrational view. But it carries costs. My frustration and associated mockery comes in with the refusal to acknowledge the associated costs and trade offs of the Libertarian philosophy v. a New Deal-type maximizing collective welfare philosophy which sees a considerable role for government policy.

The accompanyingsource of frustration is the belief that we are talking economics, rather than political philosophy. To claim that, as a general rule, relying on market forces maximizes consumer welfare if a defensible position — albeit one with which I disagree. But to ignore evidence that exclusive reliance on market forces fails to maximize consumer welfare in the face of explicitly evidence to the contrary is to move from economics to political philosophy.

I would like to suggest that the task of policy analysis is not limited to uncovering which approach has the most flaws, but to suggest the implementation of a policy that promotes the progress of science and minimizes the number of flaws based on balancing market liberty with market regulation.

I would like to suggest that the task of policy analysis is not limited to uncovering which approach has the most flaws, but to suggest the implementation of a policy that promotes the progress of science and minimizes the number of flaws based on balancing market liberty with market regulation.