Posts tagged free markets

Column on Dyson’s Nonsense

Column on Dyson’s Nonsense

Tibor R. Machan

In a recent review essay Freeman Dyson flatly asserts that “social justice demands equality. Fair reward for enterprise and achievement demands inequality.” Well, neither of these is true but for soundbites in a publication like The New York Review of Books one could do much worse. Social justice is neither social, nor just. It is an excuse for some people to run everyone else’s life.

But Dyson doesn’t stop there and adds this:

Advocates on both sides of the debate have tended to take extreme positions. Numerous utopian communities have been founded to put egalitarian principles into practice. Few of them have lasted longer than one generation. Children have a regrettable tendency to rebel against their parents’ dreams. Meanwhile, advocates of extreme free market capitalism have been preaching the gospel of greed. They glorify greed as the driving force that creates new industries and in the end will make everyone wealthy. Unfortunately in many parts of the world where free market capitalism prevails, the rich are growing richer and the poor are growing poorer. [“The Case for Far-Out Possibilities,” Freeman Dyson, NYRB, 11/10/11, p. 27]

Much of this is simply wrong–no free market capitalist champion preaches any gospel of greed. The closest may be some economists who claim that each of us is motivated to make out well in life, a point so broad that it can mean nearly anything. As Milton Friedman put it, “. . . every individual serves his own private interest . . . . The great Saints of history have served their ‘private interest’ just as the most money grubbing miser has served his interest. The private interest is whatever it is that drives an individual.” ["The Line We Dare Not Cross," Encounter, 11/76:11] So being “greedy” is merely to want to do something, anything, one likes. Self-interest is just having some interest, some goals, never mind what they are. No gospel of greed here, none!

Will freedom produce industries? Well, that and also art and athletics and family life and whatever free men and women choose to pursue. Again, nothing here that should offend any sensibilities.

Does free market capitalism prevail anywhere? Not by a long shot. At best we have some welfare states, mixed economies that include a few elements of capitalism, such a moderate protection of the right to private property and some, fewer and fewer, voluntary contracts, in the midst of innumerable socialist features and fascistic political powers. And where capitalism has made some inroads, the poor are definitely not getting poorer but growing rich, though perhaps not as rapidly as those who focus mostly on wealth care.

So why then is a famous public intellectual saying such misleading things? Maybe because his fame comes from doing work in physics, not in political economy. And maybe also because the common sense account of making it rich still owes too much to the times when that goal was pursued through pilfering, murdering, robbing and otherwise depriving others of what they have. In short, for most of the history gaining wealth was a zero sum game, not the win win situation that modern economists have found far more productive. Peace, not ripping people off, is the road to riches.

Dyson is of course saying all this nonsense in a publication that tries every which way to discredit human economic liberty. He promotes some kind of middle way, between liberty and slavery, at least in the realm of economics. But it makes no sense. It rests on obsolete theory about what gets people to create and produce wealth and ignorance about economic history and reality.

Maybe Dr. Dyson should return to physics and leave economics be. Although quite a few so called economists get it wrong just as he does, especially the Keynesians who believe that one can make something out of nothing. That confusing idea ought to be offensive a physicist for sure.

Column on Big Lie Theory Flourishes

Big Lie Theory Flourishes

Tibor R. Machan

The theory of the big (but good) lie goes back to a certain reading of Plato’s most famous dialogue, the Republic. There are more or less crude versions of it but the gist of the theory is that for reasons of state–that is, so as to secure the chance of the ruler to rule smoothly–telling lies can be justified and may even be necessary. Indeed, the big lie could well have been the very idea of the perfect political system itself that Socrates sketched in that dialogue, one that really amounts to a utopia, an impossible blueprint for a human community and its basic principles. Some have concluded from this that Plato (Socrates) never meant to advocate what the dialogue depicts as the perfect regime but merely presented it as a kind of model, the way that the gorgeous women on the covers of Vogue or other fashion magazines function, just reminders of what to pay attention to as women dress up.

But ever since Plato appeared to make the big lie respectable in politics, quite a few regimes have made use of it. And in our era no less seems to be the tactic, at least for the cheerleaders of more government planning who routinely appear on the Op-Ed pages of The New York Times. As a case in point, check out the article by Alan Tonelson and Kevin L. Kearns “Trading Away Productivity” (March 6, 2010). The gist of the piece is nothing less than the defense of international economic protectionism, a policy thoroughly discredited by now except for diehards desperate to keep their establishment and industry intact at the expense of domestic consumers and foreign competitors. Nothing new here–every politician is tempted to offer to square the circle; just watch how in Washington nearly everyone believes that one can indeed get blood out of a turnip and pay for goodies with, well, nothing.

What is far more egregious than the advocacy of defunct theories, defunct at least since the time of Adam Smith, is the premise with which these authors begin their discussion. What they say is, well, a big lie, although for The Times it is routine by now, what with the leadership of hyper-Keynesian Paul Krugman on their pages when it comes to political economy. They state, clearly without any hesitation, that “For a quarter-century, American economic policy has assumed that the keys to durable national prosperity are deregulation, free trade and a swift transition to a post-industrial, services-dominated future.” There is no truth to this claim at all.

American economic policy–and it pains me to even refer to such a thing, since a government isn’t supposed to mess with its citizen’s economic (any more than their religious) lives, not to mention make policy for them all–has been protectionist in nearly every age. Indeed, such protectionism is often held to explain some of the anger of the Japanese at America that precipitated the invasion at Pearl Harbor and the ensuing bloody war in the Pacific. Administration after administration has tried to boost the fortunes of American businesses and labor by way of imposing duties on foreign imports, be this is steel, cars, shoes, textiles, and innumerable other goods. The means by which obstacles to honest trade were implemented are various–sometimes outright tariffs or duties, sometimes phony requirements that manufacturers needed to meet before their product would qualify for importation, thus making it very expensive to import and to buy the products.

I recall that back in the 1980s I was teaching for a while in Switzerland and I ran across the nifty used vehicle I naively considered purchasing and bringing back with me to drive in the US. When I inquired about how to do this, it was made clear to me that no such deal was possible since cars built for European roads by European manufacturers lack the kind of “safety” features the US government insists cars built in the US must include. Why? No reason except that this makes it simple to kept those European cars out of the American market and gave Detroit a leg up in the effort to stay in business, never mind the demand for its products by American consumers. (You can see now how well this worked in the long run!)

This same story could be repeated several thousand times. They all put the lie to the claim made by Tonalson and Kearns about American economic policy having favored free trade. But there is more.

As to government regulations, the increase of these for American businesses over the years as been stupendous. This and many of the claims of these authors can be seen as big lies in a very informative essay written a while back by David Boaz of the Cato Institute, titled “The Truth of Milton Friedman” (http://www.cato-at-liberty.org/2008/04/21/the-truth-about-milton-friedman/). The essay exposes Tonalson and Kearns’ lies and the many others circulating these days about how America has been in the grips of market fundamentalism, of an economic policy of laissez-faire and free trade, successfully promoted by the late Dr. Friedman. What bunk.

America has always, from its beginning, been a mixed economy and the mixture is now markedly lopsided toward government interference, including thousands and thousands of pages of government regulations which keep increasing year by year. (And, no, Ronald Reagan didn’t reverse this trend!) But the big lie and the big liars will not hear of any of this and keep cheering on as the American government moves farther and farther away from even a semblance of a free market system.

Column on Sandel’s Misguided Thinking

On Sandel’s Misguided Thinking

Tibor R. Machan

In 2004–not that long before he got to be a TV star on PBS– Michael J. Sandel, the Harvard University professor of political philosophy got the enviable job of presenting his views on justice via the support of PBS television to a great number of viewers, made the following observation: “Today, in the thrall of markets and market-oriented thinking, we are all too tempted to think of democracy in economic terms alone. That is why it is worth asking whether we are a commonwealth still. To put that question at the center of our public debate, we need to remind ourselves of the civic goods that markets do not honor and money cannot buy.”

All this sounds very kind and gentle–who, after all, could object to civic goods? Who could find anything wrong with the idea of a commonwealth? These are the marks of civilized society where instead of the rule of force, we have the rule of law. But don’t be fooled. If you have listened to Professor Sandel’s PBS lectures on justice you have by now realized that what the very prominently placed educator actually favors is a highly regimented society, one in which the idea of the consent of the governed is royally demeaned. Instead of choice and freedom, what Sandel champions is order and lock step pursuit of some kind of one size fits all public good that the market allegedly doesn’t sell.

It is scandalous how this man, using a good bit of taxpayer funds, gets to preach his message of collectivism and show his contempt for American values of individualism and liberty all in the middle of the country he seems to dislike and which he seems to enjoy misrepresenting in the middle of his so called educational endeavors.

Just consider the above claim that America is “in the thrall of markets and market-oriented thinking.” If so, how come the majority of Americans elected Barack Obama their president, a man who has been quite up front in his dislike of markets and what he likes to dub the ideology of free markets, not any kind of “market-oriented thinking”? How cam Americans, on the whole, embrace public–government administered and conducted–education from the fist grade all the way to graduate school? How come their only passenger train service is provided by a government funded (and pretty much bankrupt) rail system, Amtrak? And why are they completely complacent about having a government postal service that prohibits anyone else from providing first class mail service? And how come these Americans who are “in the thrall of markets and market-oriented thinking” did not rise up in protest against the federal governments purchase of General Motors Corporation and bailout of banks and other enterprises that are by no stretch of the imagination market institutions?

What kind of a highly honored educator engages in this kind of rank distortion? Market-oriented thinking my foot! Most Americans, including especially the educated ones and those doing the education of America’s youth, do not like the free market. (I have been in the midst of American higher education since 1965 and have found nearly uniform disdain toward the free market except by some economists who defend it mainly because they focus on which system manages to be more productive, more consumer friendly. As some Russians who came to visit American universities after the fall of the Soviet Union pointed out, there are far more Marxists and near Marxists in American higher education than there have ever been in the Soviet bloc!)

Now, of course, professor Sandel has the basic human right to be wrong about what Americans are in thrall of, a right he seems very eager to exercise. In a free society one doesn’t get punished for misguided thinking except by the reality that is likely to bite one in the butt in consequence of it.

But while Sandel is free to be wrong, the rest of us don’t have to sit at his feet and complacently accept his misinformation, even if it has the prestige of Harvard University and PBS television supporting it. No, we are still free to protest what Sandel is peddling. And we are also still free to point out the specious manner in which he does his peddling, namely wrapping it in the vocabulary of civility and democracy.

Let us, please, not let the man fool us. Freedom and democracy do go hand in hand–it takes freedom for the people to be involved in politics! And freedom is not divisible–you cannot have freedom of religion, speech, and thought without free markets in which books, educational equipment, buildings for churches and newspapers, printing presses, and the labor of educators are available to be purchased instead of conscripted as in the collectivist paradise—a warped commonwealth–that Sandel wishes to impose on us all.

What Sandel has convinced himself of is that he is for the good, the public good, while those who tend to favor the American political tradition are only for human liberty, almost license. But this is bunk.

There can be no human good without human liberty for doing what is good requires the freedom to choose it. Otherwise the good is being pursued at the point of a gun and not as a matter of one’s own convictions, the only way it means anything.