Bryan Caplan  

Caught In My Own Trap?

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Arnold wonders if I've forgotten the Idea Trap I've talked so much about in the past:

He has this theory of "idea traps," in which bad ideas lead to bad outcomes which lead to populists with more bad ideas, etc. If libertarian ideas are as good as we say they are (think of how well they worked when they were tried in our Constitution), then maybe the economy would do so well that populist schemes would lose support.

This exaggerates my original claim. I've argued that economic growth improves ideas, which improves policy, which improves growth. But I've never said that the elasticity is so great that libertarian reforms are likely to take a slippery slope to Libertopia.

Still, Arnold is pointing in the right direction. The Idea Trap mechanism is part of the reason why I guessed that a libertarian takeover of academia would have such a large long-run effect on policy.

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GT writes:

What are the libertarian ideas that are so clearly better yet don't get implemented?

And what about bad libertarian ideas? Or do you think they don't exist?

James writes:

GT: Are you seriously asking for a list of libertarian ideas that haven't been implemented? Poke around this site for several examples but I'll give you two right now.

In the U.S., it's illegal for just about everyone to print money and use it to manipulate the bond market. It's also illegal for just about everyone to force people to pay for what they claim not to want. There's a loophole though which lets certain people get away with doing this stuff. Closing that loophole is an excellent (as excellent as those rules themselves are) libertarian idea which has not yet been implemented.

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