"Don’t ever take a fence down until you know the reason it was put up.”
G.K. Chesterton
Technologists and free-marketeers are obsessed with removing barriers: Barriers to entry. Frictions. Levees. Borders. All in the name of frictionless transactions.
But barriers were often put up for a reason.…Dizzy is a historian by training. The post is worth a read in full.
Economists need to pay more attention to history — and philosophy, too. Homo economicus, which is a foundational assumption of conventional, presumes a theory of human nature that is not only contested by regarded in the history of thought as puerile.
This is also another argument against the over-reliance on formal models in economics. Economics is a "moral science," as Keynes put it, rather than a natural science. It has an important and foundational economic component, as well as being historical rather than atemporal.
This constitutes another paradox of liberalism.
