Wednesday, October 22, 2014


Scott Porch posts on the Daily Beast HERE  an article “How LBJ and Reagan Wrecked Our Faith in Government”, much of it quoting Jonathan Darman, 33 year old’s, former reporter for Newsweek:Landslide: LBJ and Ronald Reagan at the Dawn of a New America”, a new history of the seismic leftward and then rightward shift in national politics during the three years after the Kennedy assassination, is a dual narrative of Johnson and Reagan during those years.
“Darman argues that Johnson and Reagan preached competing visions of a utopian America—for Johnson a government-led social reformation, for Reagan an idyllic society guided by the invisible hand of free enterprise—and neither delivered, fostering a cynical view of the United States government that persists 50 years later.
“Each of the myths discredited government,” Darman writes. “Reagan’s did it overtly, maintaining that government was the source of America’s problems. Johnson’s did it by example, making promises for government that it could not possibly fulfill. As a result, a generation of Americans has come of age with little faith in government’s ability to do much of anything.”
Leftists believe that the State is a solution to a country’s economic problems. Rightists believe the State is the problem, and a free-enterprise capitalism would solve the State’s problems.  Both are wrong in important parts of their analyses and their remedies for the other’s failures.
There are no easy remedies and no neat solutions to these problems.  
Adam Smith was pragmatic; he was interested in what worked and recognised that both State and Markets had roles to play.  Political economy is about melding the positive contributions of both States and Markets, not choosing one to the exclusion of the other.
He showed in Wealth Of Nations that where markets (and the people in them) fail to function according to well-defined criteria, intervention by the State according to broadly acceptable standards of justice could be recommended, deliberated over and, perhaps, adopted. 
Similarly, where the State fails to function according to well-defined criteria, alternative provision by markets could be acceptable and recommended, deliberated over and, perhaps, adopted (Or both run to demonstrate the most efficacious choice). Both forms of provision would require monitoring for quality of provision.

This could be sumarised as: markets where possible, the State where necessary. 


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