Road to Freedom

AEI President Arthur Brooks‘ new book, The Road to Freedom was released today, contributing to the discussion of the morality of capitalism and the symbiosis of capitalism and civil society.   The best contribution of the book, in my opinion, is the translation of the discussion of “market failure” into a common sense language and a heuristic device.  There is a handy little chart at p. 131 that helps us think through whether government intervention is warranted even in cases where the market fails to deliver some desirable good or service.   Brooks observes candidly, “Many market failures are irremediable by government at a reasonable price.   It is a “dangerous progressive fallacy,” according to Brooks, to believe that if government doesn’t address market failures they will remain unsolved.

To resolve many actual market failures, people don’t need the government at all.  They need well-functioning market, of course.  But they also need voluntary action and a healthy culture in which people do things for each other without being forced or bribed by the state.  People need what scholars call “social capital,” which is the trust and social cohesiveness that promote voluntary activity to meet challenges in civil society.