Argument: Modern economics calls for case-by-case government intervention

Issue Report: Libertarianism


Paul Krugman, The American Prospect, November-December 1996 – “Public goods, quasipublic goods, and externalities are fairly common in the real world. They are common enough that it is necessary to take proposals for government intervention in the economy on a case-by-case basis. Government action can never be ruled in or ruled out on principle. Only with attention to detail and prudent judgment based on the facts of the case can we hope to approach an optimal allocation of resources. That means the government will always have a full agenda for reform — and in some cases, as in deregulation, that will mean undoing the actions of government in an earlier generation. This is not evidence of failure but of an alert, active government aware of changing circumstances.”