At first glance, a lot of the social problems and resource waste emerging from government intervention seem pretty easy to fix: the government should just stop doing whatever it is doing that is creating the problems and the waste. The stubborn persistence of institutions and organizations that keep societies poor is a vexing problem for social scientists. In Political Capitalism, the economist Randall Holcombe takes on this problem by analyzing “political capitalism” as a distinct economic system with its own logic and features rather than as some kind of midpoint between capitalism and socialism.
As he points out, people do not generally demand “big government” in general. Rather, they demand intervention to solve specific problems when people believe using government is either cheaper or more than just relying on the market. The reader might be reminded of Milton Friedman’s observation that every businessperson believes in unregulated, free competition in every industry but their own–which, of course, must be protected and subsidized as a matter of “national security” or something like that.
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