Most economists believe open, honest, competitive markets are a good thing: consumers get products at the lowest prices and the most efficient producers get the sales. How to get there is another matter: Who keeps the markets honest? Any government with the authority to do that can also do the reverse. James Madison put it this way: “In framing a government, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. ”

Stan Zin points out a modern version from Luigi Zingales in one of The Economist’s blogs. Luigi is concerned with “crony capitalism,” in which government is controlled by business. In his words:

There is not a well-understood distinction between being pro-business and being pro-market. Businessmen like free markets until they get into a market; once they are in it they want [to use their influence] to block entry to others. Pro-marketeers want free markets at all times.

As Madison might have said: you must enable the government to control the governed, not the reverse.

Update (Aug 26 12): (1) This seems to be an old meme. Probably goes way back, but here are some examples. (2) We got lots of hits via Reddit. If someone could explain how this works and how to track it back to the source, I’d appreciate it. Email preferred.

Share this: Twitter

Facebook

Like this: Like Loading... Related