Why a hedge fund manager will tell you big government is great for capitalism

It's the insurance, stupid

Money loving
(Image credit: (iStock))

What can government do to cultivate a vibrant economy? Nothing, if you ask our political class. Ever since Bill Clinton declared that the era of big government was over, even Democrats have treated the welfare state like a drag on the free market, focusing on its social benefits rather than its economic ones.

But this is a mistake, as any hedge fund manager will tell you. Government investments in social insurance can go a long way to freeing individuals and businesses to take entrepreneurial risks and to innovate, unleashing "creative destruction" in its purest — and most humane — form.

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Joel Dodge

Joel Dodge writes about politics, law, and domestic policy for The Week and at his blog. He is a member of the Boston University School of Law's class of 2014.