Saturday, March 21, 2009

Gary Becker: No Time to Give Up on Markets

Interview with the 1992 winner of the Nobel Prize in Economics (WSJ):

That suggests that there is a risk to the U.S. system with more people relying on entitlements. "Well, they become an interest group," Mr. Becker says. "The more you have dependence on the government, the stronger the interest group of people who want to maintain it. That's one reason why it is so hard to get any major reform in reducing government spending in Scandinavia and it is increasingly so in the United States. The government is spending -- at the federal, state and local level -- a third of GDP, and that share will go up now. The higher it is the more people who are directly or indirectly dependent on the government. I am worried about that. The basic theory of interest-group politics says that they will have more influence and their influence will be to try to maintain this, and it will be hard to go back."

Still, there remain many good reasons to continue the struggle against the current trend, Mr. Becker says. "When the market economy is compared to alternatives, nothing is better at raising productivity, reducing poverty, improving health and integrating the people of the world."

Gary Becker and Richard Posner have a great joint blog that takes a point-counterpoint approach to issues (and one, based on the 2 minute rule, that I added to my blog roll). The irony is that Becker is usually the "moderate", taking a more charitable view of government interventions but the writings of both provide fascinating reads.

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