Understanding Why Government Policies Fail
Pathways to Policy Failure
by Gary Galles
American Institute for Economic Research, 2020, 490 pp.
Gary Galles, an economics professor at Pepperdine University, has in this outstanding book shown how to apply basic economic principles to evaluate concrete policy proposals. In doing so, he offers a comprehensive defense of the free market and criticism of government programs that interfere with it. Galles combines two qualities rarely found together, and it is this combination that makes his book notable. Like Leonard Read, of whom he is a biographer, he can convey free market principles in a simple and memorable way; and he also has a detailed knowledge of the costs and benefits of the policies he analyzes. Pathways to Policy Failure consists of 137 of his articles, divided into four sections, though there is considerable overlapping between them: “Underselling Self-Government: Overselling the State”; “Lax Language”; “Measurements You Can’t Count On”; and “Evaluating Policy Paths.” In what follows, I’ll be able to discuss only a few topics in the book.
You might think it obvious that the best way to evaluate an economic system is through its results, but many critics of the free market are not satisfied with the prosperity it has given us. They claim it rests on base motives and actions. It operates, they say, through a Darwinian struggle in which the strong exterminate the weak. This criticism is the opposite of the truth, and Galles here quotes Murray Rothbard; “The ‘fit’ in the jungle are those most adept at the exercise of brute force. The ‘fit’ on the market are those most adept in the service of society” (quoted on p. 9).
Success in the market depends on how well producers are able to satisfy the demands of consumers. For this reason, the free market is far more under popular control than is government policy in a democracy. People have different preferences, and there is no way for a political system to establish a consensus that everybody will accept. Even
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