deliver substantial economic progress; communism, socialism, even large bureaucratic welfare state "third ways" do not work. They sap individual incentive, initiative, and creativity and ultimately cannot deliver sufficiently rising standards of living to meet the expectations of their citizens for better material lives for themselves and their progeny. Episodic economic downturns or other perceived market failures create great opportunity for misplaced permanent expansion of government's role in the economy.Clearly, we have learned that government has a number of important roles to play in our economy and that we must remain vigilant to make sure that it plays only those necessary roles in the least intrusive manner possible. A consistent rules-based monetary policy, the lowest possible level and rates of taxation, less command and control in favor of more flexible market-oriented incentive regulation, slower growth of government spending including entitlement reform, and expanded open rules-based trade are surely the lessons of economic history and would surely be Adam Smith's wise prescription today.The theme of this year's NABE conference is "Winners and Losers of the 21st Century." Surely a large part of the answer to that implicit question is "those who can stay closest to the limited government capitalist model in the face not only of the natural tendency of the government's role in the economy to grow, but also the incredible impending demographic pressures that will greatly reinforce this tendency."The calls for capital controls, greatly expanded taxes and spending, vast new regulation, extensive industrial policy, and dangerous protectionism threaten our economic progress and personal liberty. Such calls by pundits and decriers of capitalism are frequent and occasionally frenetic, both inside and outside the economics profession. Of course, as economies evolve and conditions change (e.g., due to changing demography), the role ...
