The Soviet Experiment
By Arnold Kling
Rediscovering Fire, by Guinivere Liberty Nell, has a basic premise: The Soviet Union was a genuine experiment in trying to fix market failures, and we might want to learn from it. On p. 30,
The Bolshevik theory was that the state could outcompete private traders and slowly take over retail…State funding gave the state stores significant advantage, but only restrictions on private retail allowed the state to finally win the battle.
So much for the “public option.”
If you believe that government should try to correct market failure, why did the Soviet experiment fail? Some possibilities:
1. Bad leadership. Replace Lenin and Stalin with Krugman and DeLong, and you would be fine.
2. Government has to focus on the most severe market failures. It should have stuck to health care and the environment, and not tried to fix so much at once.
3. Don’t trust one-offs. (But then there’s Cuba, East Germany, North Korea…)
When I recommended Jim Manzi’s paper on the limits of social science, several commenters on this blog and elsewhere argued that there is a selection bias: robust results in social science that run counter to preferred techniques in social engineering get ignored; flimsy studies that support social engineering get a lot of play, only to be discredited later.
If the selection-bias story is true, then you can be quite certain that Nell’s book will be widely unread.