Saturday, September 18

What to expect from government

Burt Folsom:

On the subject of the effectiveness of government programs, Milton Friedman once wrote:

“There is a sure-fire way to predict the consequences of a government social program adopted to achieve worthy ends. Find out what the well-meaning, public-interested persons who advocated its adoption expected it to accomplish. Then reverse those expectations. You will have an accurate prediction of actual results.”

Folsom uses examples from U.S. economic history to illustrate, including this: “As a final example, in 1971 President Nixon instituted wage and price controls to halt inflation. When the price controls were lifted a couple of years later, inflation skyrocketed, and remained in the double digit range for the rest of the decade.”

More from Folsom at Reverse Your Expectations.