What's the big idea?

• Author: Hood, John
• Position: FREE&CLEAR - Ideas that changes economic conditions

Ideas matter. If I didn't think that, I wouldn't have chosen an occupation that involves the discussion and dissemination of them. Still, there are more than a few economists, political scientists and conspiracy theorists who believe ideology is irrelevant. They argue that class consciousness, inexorable historical trends or special-interest influence can explain social action without regard to the ideas being espoused.

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Nonsense. History is full of examples of important ideas transforming mankind, such as monotheism, experimental science and double-entry bookkeeping (which led to the creation of partnerships and corporations, the building blocks of modern capitalism). Human beings are willing to make great sacrifices, including their lives, to defend or advance what they believe.

To say that an idea is powerful is not necessarily to say it is true. Consider the case of Marxism. By the time my son Alex was in first grade, he had figured out the foundational tenet of Marxist economics--the labor theory of value--was preposterous. He and his friends had discovered on the playground that while two kids might put the same amount of time and effort into a task, such as playing kickball or digging a foxhole for dirt-clod wars, the actual value of their respective efforts was rarely the same. One kid invariably worked smarter or better guessed what his fellows wanted done. To suggest that labor effort determines value is to fly in the face of practical experience. But Marxist economics persists in the fevered dreams of petty tyrants and the cloistered fantasies of petty professors. Right now, some unsuspecting student is about to get a lecture on the labor theory of value from a Marxist bitter-ender. (Fortunately, the student is likely to be inattentive or drowsy and miss the "lesson.")

Formal education is only one of many methods by which people receive and come to accept ideas. Much of what we believe comes from parents, peer groups or religious institutions. Armed with modern technology that puts much of the world's library at our fingertips, we are also freer than any human beings have ever been to explore new ideas on our own.

Over the past four decades, ideas such as deregulating markets and adopting pro-growth tax codes have become increasingly powerful in public policy You may be used to thinking about them in a domestic context, but the real action has been overseas. Since the end of the Cold War, for example, 14...