Paul Krugman:

More commonly, self-proclaimed libertarians deal with the problem of market failure both by pretending that it doesn’t happen and by imagining government as much worse than it really is. We’re living in an Ayn Rand novel, they insist. (No, we aren’t.) We have more than a hundred different welfare programs, they tell us, which are wasting vast sums on bureaucracy rather than helping the poor. (No, we don’t, and no, they aren’t.)

I’m often struck, incidentally, by the way antigovernment clichés can trump everyday experience. Talk about the role of government, and you invariably have people saying things along the lines of, “Do you want everything run like the D.M.V.?” Experience varies — but my encounters with New Jersey’s Motor Vehicle Commission have generally been fairly good (better than dealing with insurance or cable companies), and I’m sure many libertarians would, if they were honest, admit that their own D.M.V. dealings weren’t too bad. But they go for the legend, not the fact.

Libertarians also tend to engage in projection. They don’t want to believe that there are problems whose solution requires government action, so they tend to assume that others similarly engage in motivated reasoning to serve their political agenda — that anyone who worries about, say, environmental issues is engaged in scare tactics to further a big-government agenda. Paul Ryan, the chairman of the House Budget Committee, doesn’t just think we’re living out the plot of “Atlas Shrugged”; he asserts that all the fuss over climate change is just “an excuse to grow government.”

As I said at the beginning, you shouldn’t believe talk of a rising libertarian tide; despite America’s growing social liberalism, real power on the right still rests with the traditional alliance between plutocrats and preachers. But libertarian visions of an unregulated economy do play a significant role in political debate, so it’s important to understand that these visions are mirages. Of course some government interventions are unnecessary and unwise. But the idea that we have a vastly bigger and more intrusive government than we need is a foolish fantasy.