10. Implications for Public and Private Sector Policymakers

This chapter discusses the implications of my analysis of government failure and market corrections for public and private sector policymakers in my book Market Corrections not Government Interventions: A Path to Improve the US Economy. Economists frequently distill the implications of their empirical research into policy recommendations. Generally, economists prioritize offering policy recommendations to government policymakers because they believe that their research will be most useful if it is included as part of the public debate and if it helps to improve social welfare. Economists rarely offer policy recommendations to CEOs or other private sector decision-makers unless their work is intended to identify ways that firms could become more profitable by increasing their efficiency and competitive strategies. I reverse economists’ priorities here because I think it is in the interest of private sector decision-makers to consider seriously the policy implications of this book even though I do not explicitly identify and recommend efficiency improvements or competitive strategies for firms to increase their profitability. Of course, it would be desirable for government policymakers to find it in their and the nation’s interest to consider seriously the implications of my discussion. But after devoting much of the discussion to the persistence of government policy failures, it would be unrealistic for me to recommend policy reforms to reduce those failures and to expect that government policymakers would consider those reforms seriously. The private sector should recognize and appreciate that market corrections have assumed great importance for the performance of the US economy because they have helped to address significant economic and social problems that government policies have failed to address. Given markets’ compelling track record, it is in the private sector’s interest to accelerate and broaden its efforts to help address economic and social goals. Of course, those efforts should and will be motivated by the pursuit of profits. But whether they lead to greater competition or technological advance or both, those efforts have produced and will continue to produce large social benefits while benefiting enterprising market participants.