Hacker News Reader

Comment by didericis | Hacker News Reader

I wish we did an actual, formal experiment in economic systems between different areas. Have one area with a similar culture and people subscribe to Austrian theories, have one follow Keynesian theories, have another follow MMT, etc. That’s the only way to make sense of these systems and do an actual comparison.

That’s susceptible to all kinds of excuse making and allegations of sabotage and cruelty and messy edge cases and would be extremely difficult to pull off in a way that satisfies zealots, but it’d have the massive benefit of actually comparing systems outside of any given framework for reasonable people.

My own personal theory is that any given economic system’s benefit is related to the collective psychology of the populace and that there are different local maximums and systems that work better in certain situations than in others.

View on HN

Obviously we cannot do controlled experiments here the same way we can in the physical sciences, but it seems that historical evidence is pretty clear by this point on whether freer markets perform better than ones with more government intervention.

Agreed. At this point the main question seems to be about to what extent you can add any knobs to a free market via reserve requirements and interest rates and taxes and government spending. I happen to think a lot of that is voodoo that tends to backfire, but I think adding knobs can work better in some places if you do it right and that it’s a legitimate and unresolved (and probably unresolvable without a crazy experiment) empirical question.

Ultimately the more I read the more I recognize my own ignorance about a lot of this stuff and think the more most people are more ignorant than they realize. That’s why I tend to gravitate towards systems that maximize freedom at the national/international level, as I think any restrictions that need to exist tend to be emergent locally if allowed.

This is one of those things, though, where the boring position is that "relatively free markets are good, but markets also require some government intervention to function well". It's not exciting or edgy, and not at all simple, because it's tricky to figure out which regulations and how much are good, and how they should change over time and so on.

"Some government intervention" has dramatically increased over the past century (after having stayed relatively flat for the century before that, since Adam Smith first came into the scene with groundbreaking ideas), so the boring position isn't so boring anymore. The government has their fingers in so many pies these days it's hard to say what even are the remaining relatively free markets.

And we are dramatically better off than a century ago. Teasing out what's correlation and causation is not easy work.

Reply on news.ycombinator.com