When Market Economists Fail

The professor paces with purpose before his pupils. “Ask yourself,” he intones, “who should decide things: Private investors who can go bankrupt and are responsible for the risks they take, or the State?” A student offers, perhaps tentatively, perhaps with confidence, “Well, the State, because it wants what is good for us in the long run. The market is just about selfishness.” The professor’s steel trap of logic slams shut. “Where is this state you speak of?” he retorts. When they say, “The state should have the power to direct resources, and the market should be suppressed,” they should remember to take out “The state” and replace it with “People chosen by parties and elected by voting dominated by large corporate interests.”

“In fact,” he continues:

you should replace “The state” with “Donald Trump.” Say it with me: “I think that corporate CEOs and professional investors should have all their funds taken away at gunpoint, and then all investment decisions, for the whole U.S. population, should be made by Donald Trump. He wants what is best for all of us, and he has a longer-term perspective.”

This tale is neither satire, nor a liberal fever-dream, nor a surreptitiously recorded exchange. It is the proudly self-reported pedagogy of Michael Munger, professor of economics and political science at Duke University, former president of the Public Choice Society, and a former editor of the journal Public Choice. His binary choice between “private investment” and “the whims of Donald Trump” to “decide things” is a perversion of so-called “public choice theory”—one all too familiar to anyone who engages in policy debates with market fundamentalists.