The Corner

Soros to Launch an Effort to Get Free-Market Ideas Out of Economics

This is quite amazing:

Now financier George Soros is announcing a $50 million effort to speed things along. This week Soros is gathering some of the leading practitioners of the market-skeptic school, who were marginalized during the era of “free-market fundamentalism,” among them Nobelists Joseph Stiglitz, George Akerlof, Michael Spence, and Sir James Mirrlees.

The basic idea behind the effort is that economists and their free-market zeal have dominated not only the past 20 years but are also dominating the current debate over the response to the financial crisis and the health-care debate.

As government spending grows even faster than it did the last eight years, and as the United States becomes more and more like Europe, I wish free-market economists were winning this fight.

Unfortunately, we see the exact opposite. Free-market economists continue to lose, as they have in the past. None of the proper lessons from the crisis have been learned. For instance, the unhealthy marriages between government and the financial industry and government and the housing industry are as strong as ever, and the government is taking over a major part of the economy. The idea that deregulation is responsible for this crisis is a myth, but it’s an enduring one.

A better use of those billions would be research showing how the government’s intervention in everything is the source of the problem. I think Soros’s fortune would be better used trying to get the government out of the market.

For a wonderful plea to get the “crony” out of “crony capitalism,” I suggest you read the testimony Russ Roberts gave yesterday before Congress on executive compensation here.