POLITICAL ECONOMY IS DIFFICULT.

Let's start with an Art Carden and Steve Horwitz essay from five years ago, "Is Market Failure a Sufficient Condition for Government Intervention?"

Pointing out imperfections in the market does not ipso facto justify government intervention, and the only certain way that market "failures" are "failures" is by comparison to an unreachable theoretical idea. Market imperfections are not magic wands that make market solutions and government imperfections disappear. Real understanding of comparative political economy begins rather than ends with the recognition that markets are not always perfect.

That is, dear reader, it is much easier to teach the interventionist Welfare Economics Paradigm on a blackboard than it is to implement the policies in practice.  Regular readers will understand the points Messrs. Carden and Horwitz make before drawing the conclusion I cite.  Perhaps it would benefit some public policy intellectuals to be more familiar with the argument.

Let's start with Robert Reich, whose Trump derangement has advanced so far that he's putting a rent seeker in the role of an Ayn Rand hero. Trump's Brand Is Ayn Rand. He's so predictable, though. "This far-right philosophy is an affront to the idea that we're all in this thing together."

Maybe Mr Reich should read and understand his critics.

Here is Robert Reich, noted progressive and professor of public policy at my old alma mater, advising President Obama on how he should respond to Republican Rep. Paul Ryan’s budget plan: “Obama must show America that the basic choice is between two fundamental views of this nation. Either we’re all in this together, or we’re a bunch of individuals who happen to live within these borders and are mainly on their own.”

That's Cato's Edward Crane, going on seven years ago, and his observations are as on point today as they were on a previous occasion Mr Reich brought out this canard.

Set aside the false dichotomy. The choice is hardly between in-this-together sheep and atomistic individuals. Tocqueville was astounded at the many ways Americans loved to work together. Granges, churches, business associations, volunteer fire departments — the list was pretty much endless. That said, these associations were voluntary and the government had nothing to do with them.

We may all be stuck together on the same planet, but we have better chances of living well on this planet by having opportunities to choose who to associate with or not associate with, or to try different approaches to face the challenges life throws our way.

Mr Reich, however, is still preaching the old-time religion.

When Rand offered these ideas [in the middle of the American High -- ed.] they seemed quaint if not far-fetched. Anyone who lived through the prior half century witnessed our interdependence, through depression and war.

After the war we used our seemingly boundless prosperity to finance all sorts of public goods – schools and universities, a national highway system, and healthcare for the aged and poor (Medicare and Medicaid). We rebuilt war-torn Europe. We sought to guarantee the civil rights and voting rights of African-Americans. We opened doors of opportunity to women. Of course there was a common good. We were living it.

That prosperity turned out not to be as boundless as people thought.

That litany of public goods conflates "government provision" with "collective consumption" (read "nonexclusive and nonrivalrous"; perhaps Mr Reich should familiarize himself with the terms of art of political economy before he writes another column.)

Those schools and universities?  For the past fifty years, they've been breaking faith with the taxpayers who support them.  Plenty of posting opportunities for me, but, damn it, I'm retired and would like to write about things that run on rails more frequently.

The national highway system?  Crumbling infrastructure, seasoned with a lot of disruption to the cities and the countryside.

Medicare and Medicaid?  Running out of money.  Yes, it's possible to raise taxes to continue to provide approximately the same level of (lousy) coverage but that's still a benefit cut.

Mr Reich, however, continues to sing from the same dated hymnal.  Praise Franklin, Lyndon, and the Croly Ghost.

He also seems to have forgotten that the signs of collapse of the Fatal Conceit contributed to people rediscovering Ayn Rand.

But then, starting in the late 1970s, Rand’s views gained ground. She became the intellectual godmother of modern-day American conservatism.

This utter selfishness, this contempt for the public, this win-at-any-cost mentality is eroding American life.

Without adherence to a set of common notions about right and wrong, we’re living in a jungle where only the strongest, cleverest, and most unscrupulous get ahead, and where everyone must be wary in order to survive. This is not a society. It’s not even a civilization, because there’s no civility at its core. It’s a disaster.

In other words, we have to understand who Ayn Rand is so we can reject her philosophy and dedicate ourselves to rebuilding the common good.

The disaster, Mr Reich, is the fatal conceit that there is a common good, particularly a common good that can be envisioned and implemented by Wise Experts, whether at Berkeley or sitting around the talk-show table with David Brooks. Mr Crane:

Neoconservative superstar David Brooks wrote in the New York Times just this past March, “Citizenship, after all, is built on an awareness that we are not all that special but are, instead, enmeshed in a common enterprise. Our lives are given meaning by the service we supply to the nation. I wonder if Americans are unwilling to support the sacrifices that will be required to avert fiscal catastrophe in part because they are less conscious of themselves as components of a national project.”

And I wonder if it has ever dawned on Mr. Brooks that the “fiscal catastrophe” we Americans face is a direct result of national projects called Social Security, Medicare, and Medicaid. Oh yes, and the national project to make every American a homeowner. Not to put too fine a point on it, but there would be no $20 trillion unfunded liability in Social Security had we allowed individual accounts. There would be huge surpluses. And limiting house purchases to individuals who could afford them would have avoided the multi-trillion-dollar disaster that national project created.

It’s enough to make you want to go out and see Atlas Shrugged. Again.

Or, continuing, would Mr Trump have been able to fail so spectacularly in Atlantic City without eminent domain to help him acquire and clear the land?  It's the habit of governance, Mr Reich, that brings us to the pass you lament.  "Politicians who take donations (really, bribes) from wealthy donors and corporations to enact laws their patrons want, or shutter the government when they don’t get the partisan results they seek."  So stop turning everything into a government project, and you stop generating the rents.

Mr Reich is the moderate in the room, though.  Elizabeth Bruenig suggests, "It’s time to give socialism a try."  That's an excerpt from a longer argument.  In the guts of her argument, which appears to be in the same spirit as Mr Reich's (collective action good, individual action bad), though, is a qualifying statement that refutes her entire argument.  Read it, and see if you can find it.

Americans appear to be isolated, viciously competitive, suspicious of one another and spiritually shallow; and that we are anxiously looking for some kind of attachment to something real and profound in an age of decreasing trust and regard — seem to be emblematic of capitalism, which encourages and requires fierce individualism, self-interested disregard for the other, and resentment of arrangements into which one deposits more than he or she withdraws. (As a business-savvy friend once remarked: Nobody gets rich off of bilateral transactions where everybody knows what they’re doing.) Capitalism is an ideology that is far more encompassing than it admits, and one that turns every relationship into a calculable exchange. Bodies, time, energy, creativity, love — all become commodities to be priced and sold. Alienation reigns. There is no room for sustained contemplation and little interest in public morality; everything collapses down to the level of the atomized individual.

Yup, it's the parenthetical. Efficiency is the discovery, and realization, of gains from trade.  Perhaps Ms Bruenig ought understand those things first.

I would support a kind of socialism that would be democratic and aimed primarily at decommodifying labor, reducing the vast inequality brought about by capitalism, and breaking capital’s stranglehold over politics and culture.

I don’t think that every problem can be traced back to capitalism: There were calamities and injustices long before capital, and I’ll venture to say there will be after. But it seems to me that it’s time for those who expected to enjoy the end of history to accept that, though they’re linked in certain respects, capitalism seems to be at odds with the harmonious, peaceful, stable liberalism of midcentury dreams.

To break the hold of "capital" over politics, reduce the role of politics. That "harmonious, peaceful, stable liberalism of midcentury dreams" was midwived by the world's biggest aircraft carriers and nuclear weapons.

Bryan Caplan has a longer response, based on the longer Bruenig argument, that will reward careful study.  The key point for today is "In a world with eight billion people, you can find unbridled lust and ravenous want if you search hard enough. But most of the lust is bridled, and most of the want is measured."  That is, "Nobody gets rich off of bilateral transactions where everybody knows what they’re doing."