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Philosophical differences on the role of the government versus the market are the main source of disagreements about economics. Critics of government intervention such as Milton Friedman fundamentally distrust government’s motives and competence, while believing that the “invisible hand” of self-interest is conducive to freedom and economic efficiency. Opponents of laissez-faire, such as John Maynard Keynes, on the other hand, believe that unregulated markets lead to instability, inequality, and even immorality. When either view is taken to an extreme, disaster can result. Pragmatism should be the basis for economic policy, not ideology, with a judicious mix of entrepreneurship and government regulation.
Professor of Economics at Swarthmore College, Stephen Golub
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