They Should Have Known Better
December 21, 1999
The only insurance against bad economic ideas is to think through all the possible consequences before allowing the idea to become policy. The U.S. has had its share of lousy economic advice in the 20th century and suffered the consequences.
Here are some of the worst ideas of the past 100 years, as recalled in a recent article in Forbes magazine by writer Dan Seligman.
- A top contender for worst idea of the century is rent control, which has done huge damage to cities around the world, from New York to Hanoi.
- During the 1980s, economists and politicians alike extolled "Industrial Policy" -- based on the assumption that the market cannot be trusted to allocate resources to the right industries so the government has to do it and revitalize ailing industries by redirecting the flow of capital in the economy.
- "Incomes Policy" was a disastrous attempt to vanquish inflation by holding down wages -- and featured episodes of presidential "jawboning" as an alternative to wage and price controls, another damaging exercise in futility.
- Then there are those laws against so-called "ticket-scalping" -- which make it illegal for buyers and sellers to reach mutual agreement on the price of an article.
Since there has been no shortage of bad ideas, chances are readers will have their own list of favorites.
Source: Dan Seligman, "Dumbest Ideas of the Century," Forbes, December 27, 1999.
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