Perfect Markets, Perfect Democracies and Pandemics by Vito Tanzi published by AIFIL (2020).
“The premature disappearance, due to the pandemics, of Luiz Villela, who, years ago, I had had the pleasure of knowing and with whom I coedited a book –‘Taxation and Latin American Integration’, edited by Vito Tanzi, Alberto Barreix and Luiz Villela, (Harvard University: 2008)—and shared many pleasant conversations, at the IDB, has given me the incentive to think, more as a dilettante philosopher than as a technical economist, about the role that efficient, or perfect, markets and good democratic governments are expected to play in today’s economies and societies. There are some, largely theoretical, roles that economists and political scientists admire and prescribe, and that, with some exceptions, they generally welcome and promote for countries. When economies and governments diverge from these roles, they are criticized.
The main point of this short article will be that, as it is true in various walks of life, perfection may at times come at high costs, and what may seen as imperfections may have merits and may even play some positive and desirable roles. It should be realized that, both the concept of progress and that of evolution are not consistent with perfection. By definition, perfection cannot be a dynamic process. It is essentially a static concept. Once it is reached, there is no incentive to change. Perfection does not allow, or does not need, change or progress. While perfection reflects a static state, progress and evolution are dynamic processes. They require some imperfections to keep evolving….”
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