Second Best

Step into the world of Second Best, the intimate newsletter crafted by Samuel Hammond. By day, Samuel is the senior economist at the Foundation for American Innovation, a think tank dedicated to harmonizing the disparate realms of Silicon Valley and the nation's capital, Washington, D.C.

His reputation was forged as the Director of Social Policy at the Niskanen Center, where he made waves with his pioneering work on child benefits. Even before that, his scholarly inquiries led him to the fascinating realm of technology policy at the Mercatus Center.

In launching this Substack newsletter, Samuel embarked on a journey to recapture the spontaneity of his thoughts with the mantra, 'first draft, best draft,' or perhaps, 'second best draft'? This platform is where he allows himself to make errors, to not agonize over the particulars, and to explore subjects far beyond his conventional domain of expertise.

As for the title of this newsletter, it originates from a notion imparted by the economist Dani Rodrik, encapsulated in the phrase: 'The world is second best, at best.' This concept arises from welfare economics, suggesting that, in the face of intractable market failures, introducing additional distortions may lead us closer to optimality. In essence, it reflects the profound insight that many ostensibly suboptimal outcomes conceal a broader, all-encompassing optimality that defies easy improvement. To illustrate, libertarians may oppose the welfare state as 'big government,' but Sam contends that robust safety-net programs can reduce the need for inefficient, ad hoc, or regulatory approaches to social protection.

In such a case, embracing a 'free market welfare state' becomes a 'second best' alternative to an idealized small government that remains politically unattainable.