Once upon a time there was a sick person. The sick person went to a hospital. The sick person was examined by two doctors. The first doctor said that the sick person should be given penicillin. The second doctor said that the sick person should be given cyanide. The two doctors could not agree, so the two doctors compromised and gave the sick person a mixture of penicillin and cyanide. The sick person died. The first doctor said that the sick person's death was the fault of the second doctor, and that the sick person would have been healed if only the sick person had been given more penicillin and less cyanide. The second doctor said that the sick person's death was the fault of the first doctor, and that the sick person would have been healed if only the sick person had been given more cyanide and less penicillin.
Some people think that the economy should be controlled by the government. Some people think that the economy should not be controlled by the government. These two groups cannot agree, so they compromise. The result is a mixed economy, in which the economy is partly controlled by the government and partly not controlled by the government. When economic problems occur, the people who think the government should control the economy say that the economic problems are the result of insufficient government control of the economy. But the people who think the economy should not be controlled by the government say the economic problems are the result of excessive government control of the economy.
The lesson of penicillin and cyanide is that when you mix things together, it is difficult to determine which is responsible for the outcome. In the case of penicillin and cyanide, we have other data which tells us that cyanide is a poison.
Furthermore, anyone who questions this data is welcome to conduct their own experiments on rats.
But in the case of the economy, we have very little other data. The small amount of other data which we have is unreliable. For example, we know that the communist economy of the Soviet Union did not work as well as the less regulated economy of America. But the government of the Soviet Union was paranoid and oppressive. Would an economy which was controlled by a government which was not paranoid and oppressive perform better, or does government control of the economy inevitably result in paranoid and oppressive government? And if a partly controlled economy performed better than a totally controlled economy, does that mean that a totally uncontrolled economy would perform even better, or is there an optimum amount of control? There is no data to answer these questions.
Without data, these questions must be answered based on theory. But without data, the theories are unproven, and must be accepted on faith. In other words, both socialism and free market economics are religions. Arguments between socialists and free marketeers are like religious wars.
Not only is there no data, it is illegal to conduct experiments which would produce data. In order to prove that a more regulated or less regulated economy would be better, you would have to set up a seperate economy. In order to set up a seperate economy, you would have to set up a seperate nation. You would have to secede. And that is illegal.
Competitive federalism would legalize economic experimentation. The central government would have very little control of the economy. Each competing government would choose how much control to exercise over its economy. Someone who favored more government control or less government control over the economy could set up a new competing government, and test how this works in practice.