Outrunning a Bear
Tyler Cowen responds to a typical straw-man argument against libertarianism.
I am more likely to think — or should I say admit — that human beings are irrational, even when the stakes are high (see the self-deception chapter in Discover Your Inner Economist). But, relative to social democrats, I tend to think that politicians are irrational actors trying to pander to irrational voters and that it can’t be any other way.
There is an old joke about two men who discuss what they would do if they were to encounter a bear in the woods. One of the men says that he would run. The other one says, “You know, you can’t outrun a bear.”
The first man replies, “No, but I can outrun you.”
Similarly when someone says to me that “markets fail,” I say that “markets can outrun you,” meaning that government intervention will tend to make matters worse.
And when someone says, “Individual consumers are not rational,” I say that “individual consumers can outrun you,” meaning that…well, what Tyler said.