Introducing Armchair Capitalists

I've been tracking their blog for a little while, and not entirely sure what to make of it. Are they libertarians? Or not? Or what? I don't know. I do know that they writes excellent posts like this one that probes policy and the fundamentals of economics in a intelligent manner. For now, I'm filing Armchair Capitalists under "Econ Wonks".

Let's consider economics in the Ec 1 sense for a moment. The standard Ec 1 course has two general themes. One is that markets work pretty well: perfect competition and so forth. The other is that markets don't work very well: monopoly, externalities, public goods, etc. Importantly, each of the market failures come with a government solution. You regulate the monopoly, tax a negative externality, have government explicitly provide public goods.

If you stopped after the first half of the course, you'd probably become a libertarian. If you stopped after the second half of the course, you'd probably become a technocrat. But I think both of these responses are wrong. The first doesn't recognize the failings of markets and the second doesn't recognize the failings of government. Markets aren't always efficient and policy isn't always optimal. The failings of government I'm talking about here have nothing to do with price controls or central planning or anything of that sort. Those sorts of "failures" are absolutely considered in the technocrat framework. Rather, I'm talking about the inability of government to separate itself from politics and enact ideal or near-ideal policy. There may also be some doubt as to whether we can formulate ideal policies for the real world.

So, libertarians and technocrats, step back from your views a bit. Consider the world in its total imperfectness. Use caution when embracing both markets and government policies.

You get two economists in one blog at Armchair Capitalists -- Henry and Issac.