Archive for October, 2009
According to the UK’s Financial Times, international financial speculator George Soros is going to spend $50 million of his money in an effort to start a new think-tank whose purpose will be to counter the “unwavering belief in unchecked free markets … [that] remains pervasive in universities” (“Soros to invest $50m in economic think-tank,” October 27). As Soros put it himself thus: “The ideologists in the free markets are still in command and I think they’ll be very difficult to remove because they have tenure.” Actually probably because even those who don’t have tenure consider the free market system sound while other options deeply flawed — but never mind.
There is so much wrong with Soros’s claim and plan that it would take a book to refute all of it but, as Professor Don Broudreaux, one of the few genuine free market economists, and one who heads the economics department of George Mason University, put it, “Mr Soros should check his facts before wasting his money. As my colleague Bryan Caplan reports in his critically acclaimed book ‘The Myth of the Rational Voter’ (2007), surveys show that, while economists are to the right of their university colleagues in other disciplines, ‘[c]ompared to the general public, the typical economist is left of center.’”
As Caplan notes, university economists do tend to work from the free market frame of economic reference, but this is actually only in their purest theoretical studies. When they teach about the ways of the economy they normally factor in all the non-free market variables that are present in actual economies around the world, such as extensive government regulation and other intervention, protectionism, laws intruding on the employment relationship, etc., etc. Arguably, too, it is difficult to conceive of teaching and studying economics without the use of the free market economic model since trade itself, business and economic activity, rests on the idea that people voluntarily exchange services and products. There is no such thing as socialist economics since under socialism trade isn’t voluntary. There is only socialist planning of production and consumption, all of which happens as a result of the government’s orders. What else can economists do but turn “right” when they study and teach about bona fide economics? Imagine teaching and studying biology where life has been nearly fully extinguished!
What Soros wants to have done at universities is unclear but probably he is intent on having teachers and students focus on how production and consumption should be given firm direction by public officials. Because once one abandons the free market model, that is the alternative left, planning by edicts instead of the demand and supply of free market agents. Indeed, Soros appears simply to want to abolish the teaching and study of economics proper. Without such a drastic measure, economics will always be mostly about the conduct of free market agents who, of course, may be more or less constrained by regulations, and such. And that means that all economics will lean toward free market studies.
Soros tried to torpedo what’s left of capitalism in the past, including by starting up a bunch of Open Universities in the former Soviet bloc where he appears to have been worried the public would embrace the free market, having had its fill with socialist planning. The designation of his institutions as “Open” came from Soros’s vague affinity with the late Karl Popper’s politics, advanced in that thinkers famous book The Open Society and its Enemies (1953). But while Popper had meant by “open” pretty much what “free” means in the context of political economy, Soros appears to have meant by “open” simply a society that’s not closed to any experiment, however oppressive it might be. His schools, too, would be open to the teaching of any form of economics, preferably, I would guess, those he could proceed to manipulated for his own ends.
Whatever it is that Soros is aiming for, one thing is clear: he despises freedom in the market place. And so long as there is any trace of respectful discussion of free markets in universities, Soros is going to spare no money in thwarting it.
I must admit that it gives me some pleasure to see Soros behave this way which gives disproves all those who claim that people who escape from oppressive, tyrannical regimes automatically prefer the free society. Not so by a long shot, as Soros demonstrates all too clearly.