>I haven't seen your book Michael. But on the negative side,
>capitalism certainly
>steers scientific development in directions which have proven to be
>harmful. It has
>also impeded development of science that could be beneficial. I
>don't doubt that it
>is a double edged sword. I think that on balance it has been
>positive. I think it
>could do better. But I also think that those who say there have been
>no benefits are
>simply moving air to no purpose.
>
>Rod
It is odd, and I do not understand, just why it was that
really-existing-socialism was so *lousy* at those parts of economic
activity where externalities are rampant and decentralized atomistic
decision making works worst.
In technological development and in pollution control all of our--at
least my--theories predict that a centralized bureaucracy should do a
better job than a market in which the key outputs--low pollution, big
externalities from other people's innovations--aren't priced. Yet the
really-existing-socialist economies fell down most not at the
deadweight-loss-triangle-reducing activities of matching marginal
private cost to marginal private demand, but in these two essentially
collective aspects of economic life.
Makes me think we need much better theories of government failure
than we have...
Brad DeLong
