Real World Economics

Virginia Postrel from the February 1993 issue

(Page 2 of 2)

When business people draw the wrong conclusions from international comparisons, they lose money. When scholars do, they lose academic reputation. In both cases, they bear the burden of their mistakes.

Policy makers can also learn from the international scene. But they, too, will make mistakes–no matter how smart or careful or well-meaning they are. And their mistakes will have far greater consequences, because they are playing with other people's money and other people's lives and because a mistake, once written into law, is hard to correct.

The interventionist ideologues who populate the Clinton administration don't understand their own limitations. In their common conviction that the government must direct the economic choices of the nation, deciding where and how much to invest, they are substituting their monolithic decision making for the experimentation of thousands of businesses. By doing so, they are increasing both the risk and the cost of error. And, judging from the Little Rock conference, there will be errors aplenty.