What is Second Best?
Welcome to Second Best, the personal newsletter of Samuel Hammond (but you can call me Sam).
My day job is as senior economist for the Foundation for American Innovation, a think tank focused on bridging the cultures of Silicon Valley and DC. Before that, I was the Niskanen Center’s Director of Social Policy, best known for my work on child benefits. Before even that, I researched technology policy at the Mercatus Center.
I started this Substack in order to get back into the habit of writing down my ideas when they come to me, on the motto of “first draft, best draft” (or should that be “second best draft”?). In other words, this is an outlet for me to make mistakes, not sweat the details, and to meander off into topics far outside my proverbial lane.
Who are you?
In a past life, I was an active blogger at Sweet Talk Conservation and, before that, Abstract Minutiae. I’ve also blogged on occasion for The Commons at American Compass and on Medium.com. Feel free to follow the links for those archives.
As for the title of this blog, it comes from an expression I first learned from the economist Dani Rodrik:
“The world is second best, at best.”
The phrase refers to the theory of the second best in welfare economics. In short, it says that, whenever there’s a market failure that can’t be easily corrected, adding additional market distortions may actually get you closer to optimal. Colloquially, it captures the small-c conservative (but quintessentially Hegelian) insight that many seemingly suboptimal outcomes belie a deeper, all-things-considered optimality that cannot be easily improved upon, at least without first reconstructing why things are the way they are. The rational is actual, after all. Just ask Coase.
To give just one example, libertarians often oppose the welfare state as a form of big government, but suppose robust safety-net programs also reduce the demand for comparatively inefficient, ad hoc or regulatory approaches to social protection. If that turns out to be the case (as I’ve argued it does), then embracing a “free market welfare state” would represent a “second best” alternative to a small government utopia that’s politically out of reach.
If that piques your interest, please subscribe. Or don’t. It’s not for everyone.