Today I spent most of the day selecting articles for the next issue of the Hoover Digest, which I edit. At the usual low point in the afternoon—the slump hour between two and three, when the color seems to leech from the day, turning everything monochrome–I came across a discussion of law and economics by Richard Epstein, a law professor at the University of Chicago, that contains the following passage. Brief as it is, the passage struck me as so perceptive, so really brilliant, that it pulled me right out of the slump. Marvelous what a touch of real intelligence can do. Now that the Cold War has ended, Epstein writes,
No longer is it said that the state can outperform the market. Rather it is said that the market itself suffers from certain “failures” that justify forms of state intervention to protect individuals who are hurt in the process. The movement toward collectivization of all public activities, if it is to take place today, will not rest on a single bold initiative that casts aside the private sector. Instead, it will take place in the form of a multiple attack along different margins, where each individual struggle does not generalize easily across the board.
The long-standing objective of the modern closet socialist is to consolidate the separate beachheads after they are taken over. Thus, state dominance can be portrayed as a device that takes the irrationality, impersonality, and cruelty out of markets and not as a device that dispenses with their use altogether. In effect, the discourse takes the form of an intellectual two-step. Step one: markets are all right when they work. Step two: but markets do not work in this particular area, be it health care, labor, housing, agriculture, or whatever, each with it sown “special” problems.
In one sense, the quiet blessing in this approach is that it obviates the risk of a catastrophic conversion to state control through aggressive nationalization. But it gives rise to a multiple-front war in which substantial chunks of voluntary markets always find themselves at risk. The case against overall socialism is irrefutable today. But the desire to keep up with its egalitarian objectives continues to exert a considerable influence in practice.
–Richard Epstein, Free Markets Under Siege, Hoover Press, pp. 10 -11