Rodrik vs. Tabarrok on Interventionism

Dani Rodrik makes an argument that is straight-up bizarre; Alex Tabarrok thinks it might be the worst argument ever. Interestingly, it’s Rodrik himself (in responding to Alex) who puts the libertarian response in its pithiest form: “ok, now that we have shot ourselves in one foot, you think we should shoot the other foot as well?” Indeed.

And then, after aptly summarizing the libertarian position, Rodrik doesn’t try to refute it; he just lets loose with another round of “libertarians are simplistic and dogmatic while the rest of us are sophisticated and empirical.” See Alex’s dead-on response.

It’s really mind-boggling. Essentially Rodrik starts off by saying that government interventions in healthcare, education, macroeconomic stabilization, ad infinitum, are desirable despite the fact that the problems justifying such interventions are “rarely documented with any precision,” and despite that fact that “empirical evidence on these market imperfections is sketchy, to say the least” (Rodrik’s own words). And then he turns around and accuses libertarians of being dismissive of empirical evidence!

He also adds, “[T]here are really deep philosophical differences here [between libertarians and interventionists] that have nothing to do with economics per se. Most importantly, I believe government can be a force for good; they do not.” Of course, most libertarians do admit some role for government, such as in enforcing rights of person and property, so it’s a strawman to imply that libertarians don’t think government can ever be a force for good. But set that aside. What’s really interesting here is the self-proclaimed empiricist trying to shunt real economic issues into the realm of untestable philosophical differences. There are pure philosophical differences, to be sure. But whether government is likely to produce effective and efficient policies is assuredly an economic question that can be addressed both theoretically and empirically. Public choice economics has shown in theory why politicians, voters, and bureaucrats face systematically poor incentives to adopt good policies, and the evidence amply demonstrates that government agents often do behave in a manner inconsistent with the interests of the public. So who is ignoring the evidence here?