Quote of the day & the perversion of economic development

From the Foundation for Economic Education:

"The sun would still rise in a world without General Motors."

The Perversion of Economic Development
By Lawrence W. Reed

Lawrence W. Reed, economist and author, is President of The Mackinac Center for Public Policy, a free market research and educational organization headquartered in Midland, Michigan.

In a country known for having forged the world's highest living standard from what was wilderness scarcely 200 years ago, one would think that “economic development” is a well-understood concept. Unfortunately, it isn't.

In recent decades, economic development has come to mean something other than the spontaneous, entrepreneurial phenomenon that built America. It is often thought of as a kind of activist, public-policy responsibility of state and local governments. It rarely is defined as a “fair field and no favor” approach in which governments keep themselves unobtrusive and inexpensive so as to give wide berth to free markets. Instead, economic development conjures up notions of bureaucracies and commissions directing resources, subsidizing specific firms, granting special tax breaks to some and not to others, and erecting a vast network of regulatory incentives and disincentives to affect behavior in the economy.

In short, economic development has come to mean what many statists and central-planning types are fond of calling “industrial policy.” They think the marketplace lacks direction and needs the assistance of officialdom. With tax dollars in hand to bestow upon the favored few, bureaucrats claim new prophetical powers of distinguishing the winners from the losers in the marketplace.

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