Academic

MICHAEL BARONE: Obama?s state capitalism: A failure of modesty. The fact that the private-sector?

By Glenn Reynolds

MICHAEL BARONE: Obama’s state capitalism: A failure of modesty.

The fact that the private-sector economy has not responded as administration economists expected and confidently predicted should be a wake-up call.

It shows the limits of expert knowledge and of the ability of political actors to make optimal economic choices.

The intellectual firepower of this administration may be high. But so was the intellectual firepower of the postwar British Labour governments that nationalized steel and auto companies and the railroads.

That didn?t turn out so well, and for decades the British economy lagged behind those of America and its European neighbors. State capitalism has been tried before. It didn?t work. Market capitalism works better because it doesn?t depend on one set of actors to make all the choices. Entrepreneurs with a vision for the future can take their chances, and most may fail. But some will turn out to be Bill Gates or Steve Jobs, who changed our world in ways that 99 percent of economic experts were unable to predict.

Indeed. You could write a book about it.

Full post as published by Instapundit.com on August 11, 2010 (boomark / email).