A Passion for Liberty
Tibor R. Machan @ Rational Review
Posts tagged free market
From the Machan archives (April, 2009)!
Nov 10th
“Tempered by Government”
Tibor R. Machan
There must be some enormous carrot stimulating the proponents of a closely monitored and extensively regulated American economy. I reach this conclusion because day after day I run into essays, columns, commentaries on TV and radio, in which there is a constantly repeated and concerted effort to discredit free market capitalism.
The latest of these I have run across is a review in The New York Times Sunday Book Review, April 19, 2009, where one Louis Uchitelle states that the authors of the book he is reviewing, titled Animal Sprits, How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism (Princeton University Press, 2009) and written by George A. Akerlot and Robert J. Shiller, “challenge the reigning free-market ideology of the past 30 years or so….” He concludes the review–a gushing one for sure–by urging the authors of the book to “push hard” in the direction of “revamping economic theory to deal with a market system that, quite irrationally, failed to govern itself.”
Neither the reviewer nor the authors give any proof that we have all been under the spell of laissez-faire capitalism. They just assert this as taking even a miniscule peak around the country could easily confirm their idea. Yet, it’s just the opposite they could confirm.
As a rather quick refutation of this idea, that we have all been in the grips of free market fundamentalism–a claim made the famous Princeton economist, Paul Krugman in one of his columns for The New York Times–let us recall a point made by the late Milton Friedman at the 2002 Mt. Pelerin Society meetings in Chattanooga, Tennessee. In that talk Friedman reported that “In 1946, there were 9,000 pages in the federal register [which lists all the federal government regulations]. Today there are over 80,000 pages. The situation is the same in most western countries….” So why then go on repeating this myth of a supposed orthodoxy of a fully free market place in America, one that was in full force as the 2008-2009 economic fiasco transpired?
It’s not very difficult to ascertain that no free market system has been in place in America, ever, and that whatever elements of it did manage to find themselves part of the American system have by now been squashed good and hard. Oh, the legacy of FDR’s New Deal!
These authors and reviewers must be counting on their readers’ total ignorance of economic history. I suspect that promulgating the myth that it was a free marketplace that brought about the economic mess serve the purpose of disguising the real culprit, namely, the extensive forcible government intervention in peoples’ economic affairs in America and elsewhere. Among other things, if one can persuade people that it was “a market system that, quite irrationally, failed to govern itself,” whatever minor traces of capitalism can be found in the American economy will come under extensive government regimentation–or at least state nudging (a term used by New Deal enthusiast, Cass Sunstein, who used to be President Obama’s colleague at the University of Chicago School of Law and just recently moved to Harvard where he was picked to help President Obama to re-regulate the country).
For the umpteenth time, the free market didn’t do it. Moreover, it couldn’t have done it. That’s because there hasn’t ever been one in the country. And what elements of such a system could be found over the last 40 years, they have been pretty much abolished.
In plain terms, then, since there hasn’t been a free market in America over its entire history, it cannot be the case that such a market failed to “govern itself.” What America has been all during its economic history is a mixed system, with admittedly significant elements of capitalism, socialism, fascism and the like being tried by the statists in our capitols and promoted by their academic and journalistic cheerleaders, the likes of Paul Krugman, Louis Uchitelle and many, many others who probably sit and wait so as to get the nice government job of running other people’s economic lives!
In any case, book reviewer Uchitelle doesn’t by any means fail to disclose his agenda. He says outright that what we needs is to temper the market by the government. The fact that his involves coercing citizens all over the place, deploying prior restraint on all the agents in the marketplace under the benign-sounding rallying cry of “precaution,” does not make even a dent in the faith of these people in government’s purity of motives and their incredible conceit that they, instead of the millions of those in the market, can run things just fine!
Also, there’s no evidence that critics of laissez-faire have read public choice theorists who have shown that government regulators are every bit as tempted to misbehave as are those they are supposed to regulate–indeed more so.
We should heed the counsel of Oliver Cromwell, who wrote that “It will be found an unjust and unwise jealousy to deny a man the liberty he hath by nature upon a supposition that he may abuse it.”
Column on the American Right
Nov 7th
American Right Wing
Tibor R. Machan
When those on the political Left refer to defenders of the free market
system as “right wingers,” there is understandable concern about how the
term is being abused. Classical liberals, the supporters of both economic
and civil libertarianism, have been anything but “right wingers,” quite
the opposite.
In European political history the Right has been royalists, fascist,
traditionalists, and even militarist, while the Left included mainly
socialists, communists, and welfare statists. Those who champion free
market capitalism do not fall within either of these groups because they
tend, in the main, to oppose statism or the use of the government for
purposes of problem solving. For the classical liberal the problems in a
society are best addressed within the private sector.
In America the classifications are different because America’s distinctive
tradition includes classical liberalism. The right wing in the USA isn’t
mostly fascist or royalists but religious and traditionalist but since a
central feature of tradition in American politics is classical liberal or
libertarian, labeling champions of the fully free system “right wingers”
makes a certain amount of sense. But it can also serve a dubious agenda of
the Left, namely, to associate free market capitalism with right wing
statism, as if the likes of F. A. Hayek, Milton Friedman, Ayn Rand, and so
on had anything at all in common with fascists and royalists. (The Left
here is very eager to make it seem that Milton Friedman “Chicago Boys”
embraced General Pinochet of Chile rather than the other way around!) But
the association serves the not so hidden purpose of smearing them in
virtue of how the Right elsewhere does veer very close toward fascism and
royalism.
In the current dispute about the vast and rapid expansion of the role of
government in society, increasing government’s scope by leaps and bounds,
charging opponents with being right-wingers comes in handy. These
opponents are indeed a coalition of libertarians and American
conservatives because libertarians oppose statism on principle and also
for a variety of practical reasons and American conservatives oppose it as
a matter of the American political tradition–for example, the Declaration
of Independence and the Bill of rights. But the American right is quite
selective about embracing liberty. Mostly American conservatives support
free markets but not so much civil libertarianism. On that score the
American Left is more like the libertarians, although mainly for
opportunistic reasons.
This is evident on how readily the American Left, along with others on the
Left across the globe, supports the likes of Venezuela’s strong man Hugo
Chavez as well as Fidel Castro. In the case of these political figures,
the Left abandons its apparent support for civil libertarian ideals,
mainly because the American Left tends to share the revolutionary goals of
other Left wingers around the globe and any revolution, Left or Right,
would be slowed down by principled civil libertarian policies. So while
civil libertarianism is useful for the Left as it combats general right
wing measures such as those included in the more hysterical elements of
the homeland security, it is likely to be abandoned once the Left gains
power in the USA. For example, the White House’s overt attacks on Fox TV
news, or global warming skeptics, or its badmouthing of the opponents of
Obama & Co.’s health care ideas–instead of doing honest debate with
them–shows how little the American Left cares about civil libertarianism.
Yes, opposition to George W. Bush’s policies vis-a-vis terrorism suspects
has the ring of civil libertarianism about it. But at bottom that does not
seem to be the main reason for it. We can tell that from how readily
similar policies by Leftist governments around the globe do not disturb
many on the Left. Political categorization is not always easy and there
are too many exceptions in nearly all instances of it. (A Left oriented
public figure and commentator such as Nat Hentoff cannot be considered
merely opportunistic about civil liberties!)
In America the category of “right wing” is complicated by the fact that
the American political tradition is classical liberal, not at all royalist
or fascist. But without making this clear, those who label their opponents
right wingers capitalize on the fact that the Right includes racists and
anti-Semites, thus giving champions of free market capitalism a bad name
by including them on the Right.
