In this essay, a young economist, Alexander Salter, jousts with a much older economist (Dani Rodrik of Harvard) and easily comes out on top. The dispute is over the claimed superiority of mercantilism (supposedly enabling beneficial cooperation between the government and the private sector in Rodrik’s view) versus the market liberal view espoused by Salter. Salter easily shows why Rodrik’s claims fail to convince.

I’d put it this way. Politics necessarily interferes with the efficiency of market processes because politics involves decisions by people who don’t stand to lose their own money and who get to employ coercion. That just can’t improve upon unconstrained competition among people who are playing with their own money.