In any case, I don't doubt that there are laissez-faire die-hards who cannot accept that markets sometimes fail on their own steam, but I'm quite certain neither I nor Mr Rajan is among them. Vernon Smith, one of my intellectual heroes, and a laissez-faire kind of guy, has shown in his trailblazing experimental work that bubbles arise again and again without special assistance. My own Hayek-inflected views, which put a heavy emphasis on ineradicable ignorance, straightforwardly imply the possibility of coordinated failures of economic foresight.
[Conservatives'] view is that if you take a responsible, measured, well-reasoned approach to the world things will work out. Failure is thus a sign that you have not done that.Heck, I'm running out of my quotation quota...Go read the whole thing. He's full-on with Aretae's Meta-Law: Expect Errors
My sense is that this is fundamentally crap.
...Second, even in the short term your plans almost certainly won’t work out. Most ideas are bad ideas and there are infinitely more ways to fuck something up than to get it right.
...And, most importantly it is best done with humility, knowing that in all cases that, “but for
the grace of Godpure heartless luck, there would go I”