Richard A. Epstein, Professor of Law at the University of Chicago, explains how there are substantial gains to be made from countries getting 'easy' policy decisions correct. Societies collapse and become impoverished when they do not accept the basic principles of freedom to contract and competition. Even in the developed world these principles have not been accepted in key areas such as agricultural and labour markets. Significant welfare gains could be achieved from liberalisation in both areas.
Epstein explains how liberal economists, politicians and civil servants often spend much time discussing 'difficult' cases. While these issues may be important to particular groups in society, the implications of getting 'difficult' cases wrong is not serious. Thus policy-makers and their advisers, Epstein says, would do well to concentrate on the 'easy' cases.
It was the failure to grasp this point clearly that led Friedrich Hayek, in The Road to Serfdom (1944), to be too gloomy about the fate of democratic institutions in western Europe and the United States. Socialism does not always lead to national socialism, so long as these critical minimum conditions for political freedom are respected across the political spectrum. Once this distinction is kept in mind, it becomes clear why we can properly count Franklin D. Roosevelt as a great American president on the political frontier even while taking strong exception, as I shall do, to the misguided economic policies that permeated his New Deal. Roosevelt’s contemporary competition in the category of world historical figures was Adolf Hitler, Joseph Stalin, Mao Tse-tung, and Chiang Kai-shek. In that group, Roosevelt, along with Winston Churchill, stood tall as a beacon of liberty in a world that had plunged into disaster. Conrad Black (2003) may well be right to hail Roosevelt as a great figure, and even as the saviour of capitalism, but Roosevelt’s success on the political level should not blind us to his shortfalls on the matters of economic and legal policy, especially on the matters of agriculture and labor, which are the central theme of this lecture.