Monday, October 3, 2011

Trying to replace the market, and failing

In the wake of the Solyndra mess, yet another example has cropped up of the perils (nay, the certainties) that accompany attempts to replace the market mechanism with government.  The market mechanism has private entities deciding where to put their own money by assessing risks and rewards, both of which are borne by the private entity.  It's far from perfect, but is much less corrupt and infinitely more likely to be successful.  The government mechanism allocates other people's money (tax revenues) to politically connected firms based on wishful thinking about economically inferior hare-brained schemes.

This is not an indictment of the Obama Administration, in particular, because this is the nature of the beast.  It is, however, an indictment of the naive belief that the world would be a better place if the profit motive was replaced with social motives in the hands of 'caring' bureaucrats.  Bureaucrats are not better at choosing winners, no one will make proper decisions when playing with other people's money, and business decisions made by political entities will almost always be made in favor of the politically connected. Corruption and failure are the inevitable result of such a framework.

Corruption in pursuit of 'noble causes' such as green energy is still corruption.  It's no less wrong and no more noble than handing out defense contracts to political cronies, or using your position to force taxpayers to build an unnecessary airport that you name after yourself.