Correction to This Article
This column misidentified the Jim Manzi who authored the lead article in the winter edition of the magazine National Affairs. It was Jim Manzi, the executive chairman of Applied Predictive Technologies in Arlington, Va., not Jim Manzi, the former chief executive of Lotus Development Corp. and chairman of ThermoFisher.
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Big business vs. big government: An age-old balancing act

The question is not simply whether innovation will be "stifled," as the business community likes to suggest, but whether those innovations serve a larger social purpose.

At the same time, just because markets have recently failed us does not excuse giving a free pass to those who argue for tougher regulation or bigger government.

History is replete with examples of well-intentioned regulation that turned out to be easily evaded or resulted in unintended and unwanted consequences. And too much of what passes for vital public expenditure turns out to be nothing more than special interest rent-seeking and economy-distorting subsidies.

Despite repeated efforts at reform, government accountability remains an oxymoron. Simply put, public employees are paid too much just for showing up and too little for outperforming their peers or our expectations.

And while it is now beyond dispute that labor markets today are generating incomes that are increasingly unequal, governments have found it remarkably difficult to come up with cost-effective programs that successfully offset those effects.

"An America that wants to keep its global edge cannot neglect the necessity of innovation and growth, any more than it can ignore the necessity of social cohesion and stability," Manzi writes at the conclusion of his essay. The political challenge for the next decade is not only to strike the proper balance between them but to perfect the public and private institutions that can deliver on those promises.

Happy New Year.

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