Unwarranted Intrusions, The Case against Government Intervention in the Marketplace.
Martin Fridson, John Wiley, 2006, 294 pages, £16.99.

This well written and often funny book provides an excellent intro-duction to the politics and economics of government intervention in US markets. Unwarranted Intrusions presents cases ranging from party funding to the classification of Catfish in order to demonstrate two points. Firstly, politicians will say and do anything to get elected, and secondly, government intervention into markets is almost always damaging – and is usually initiated for the wrong reasons.

Fridson uses case studies to portray a world of nepotism, corruption and special interests at the heart of the political system. The intuitive strength of his arguments rarely fails to excel; however, occasionally when the supporting facts of the case are less conclusive he is forced to rely on rumour. In the case of the government-supported entities (GSEs) that provide mortgages to low income households he suggests that the presence on the board of George W Bush’s classmate at Yale and other individuals with political connections has allowed the GSEs to maintain their preferential status. No evidence is provided to support this. The argument boils down simply to inferring that where there’s smoke there’s fire.

The key chapters on the issues of free trade and agricultural subsidies are disappointing. The author misses the opportunity to deal a blow to supporters of these policies, and rally public opinion against the scandal of US protectionism. Fridson’s criticism of trade barriers shows that protectionism can be damaging, but fails to establish just how damaging it can be. Similarly the chapter on agricultural support just lists the forms of intervention available to policymakers and why they may be damag-ing. Fridson conveniently ignores the implications of doing away with these subsidies. There are short-run economic costs, but the social costs can be enormous as factors of production are shifted away from agriculture and wealth is distributed to different regions. There is no question that Thatcher’s decision to close the coal mines benefited the long-run performance of the UK economy, but the effect on the north of England was devastating. Also complex issues of international cooperation arise from the interaction of US farm subsidies with other programs such as the European Union’s Common Agricultural Policy. These problems are significant.

But one should not expect the rigour of an academic article in a book written to be accessible to non-economists. Fridson’s excellent use of anecdotes and utterly cynical view of politicians makes for an enjoyable and informative read. Well worth the price of admission.

Richard Snook
Centre for Economics and Business Research