It’s pretty hard to cycle through the University of Chicago Law School (or at least it used to be back when I was a student) without gaining an appreciation for the extent to which markets, while subject to occasional failures, enhance human welfare by channeling resources to their highest and best ends. It’s also hard to spend much time at Chicago without coming to understand that government interventions, despite the best intentions of the planners, often fail, given planners’ limited knowledge (see, e.g., Hayek) and bureaucrats’ tendencies to act, like the rest of us, in a self-interested fashion (see, e.g., the public choice literature). Indeed, even left-leaning Chicagoans like Cass Sunstein, for whom I have tremendous respect, appreciate these ideas and therefore tend to advocate (somewhat) limited government interventions that are targeted at real market failures and that preserve space for private ordering. (See, e.g., Sunstein’s “libertarian paternalism,” which has occasionally been derided on this blog but is a far cry from the “paternalist paternalism” we’ve been seeing from the current Administration.)
When President Obama was elected, I hoped and expected that his time at Chicago would influence his policy prescriptions. It hasn’t done so. Not only did he push through two of the most market-insensitive and government-confident pieces of legislation in modern history (the stimulus and the health care law), but even his “move to the center” speech following a mid-term shellacking advocated central planning in the form of pick-the-winner “investments” in green technologies, high-speed rail, etc. His answer to economic stagnation isn’t sound money and the creation of institutions that permit entrepreneurs to flourish without fear of excessive regulation and confiscation. Instead, he wants government to step up and push America forward, as it did in the space race with the Russians: “This is our generation’s Sputnik moment!”
I’ve often wondered how Mr. Obama managed to spend so many years at Chicago without absorbing the ideas that seem to saturate the place. Richard Epstein offers an answer in today’s Wall Street Journal (which quotes an interview Epstein gave to Reason TV):
Reason: The economy has lost 3.3 million jobs, consumer confidence is half its historical average, and unemployment is 9 percent. To what extent is Obama responsible for this?
Richard Epstein: He’s not largely or exclusively responsible, but he’s certainly added another nail into the coffin. The early George Bush—I think he got a little bit better through his term—and Obama have a lot in common. Bush wanted a pint-sized stimulus program that failed and Obama wanted a giant-sized stimulus program that failed. Neither of them is a strong believer in laissez-faire principles. The difference between them, which is why Obama is the more dangerous man ultimately, is he has very little by way of a skill set to understand the complex problems he wants to address, but he has this unbounded confidence in himself.
Reason: So he’s the perfect Chicago faculty member.
Epstein: He was actually a bad Chicago faculty member in this sense: He was an adjunct, and we always hoped he’d participate in the general intellectual discourse, but he was always so busy with collateral adventures that he essentially kept to himself. The problem when you keep to yourself is you don’t get to hear strong ideas articulated by people who disagree with you. So he passed through Chicago without absorbing much of the internal culture.
So that’s it….