Tom Smith Gets Error Costs

Cite this Article
Joshua D. Wright, Tom Smith Gets Error Costs, Truth on the Market (January 20, 2009),

Here he is making the very basic but critical point while responding to Delong’s critique of classic liberalism:

DeLong explains why classical liberalism/libertarianism is wrong. I agree with much of what he says. The problem is, and it’s a very basic mistake and I don’t understand why people keep making it, is that just because private incentives sometimes don’t work to achieve some public good, or that because markets can have big booms and busts for example, that there necessarily exists some state intervention that can do something about it. Nor does it mean it’s “worth a try” if you don’t really know what you are doing. There are diseases. The body’s unbelievably sophisticated system of homeostasis frequently and ultimately always fails to keep us alive. This does not mean every disease has a cure we know about or even could ever know about.