Another Lesson in Freedom

Tibor R. Machan

When I became seriously interested in the free market I began, also, to encounter a good deal of criticism of that system, mainly because the critics mindlessly blamed the great depression on it. But looking at it more carefully I learned that by the time of the Great Depression there was nearly nothing left of laissez-faire capitalism in America. Sure, compared to some other countries there was more capitalism here than elsewhere but compared to a dead drunk someone who only staggers around a bit from booze seems nearly sober. Sadly, America was never "sober," never a completely free market economy and after the populist political economic influences of the early 1900s only the momentum of the remnants of a free economy was in evidence. Contrary to widespread myth, FDR did not rescue the country from the government induced Great Depression--it was the Second World War that exerted the greatest remedial influence.

One thing critics of capitalism kept repeating since the New Deal is that nothing like the Great Depression and the economic mess surrounding it can happen now since government stepped in with all its regulations and safety measures. Now, the mantra went, it just cannot happen here any more.

When the current economic slide began to be undeniable, defenders of the welfare state, of extensive government intervention in the market place, started to blame it all on market fundamentalism, on the "ridiculous confidence" shown in the free market system. Of course, this was a ruse and continues to be, as put out by the politicians who keep this way adding fuel to the fire they set in the first place. They keep repeating the lie that deregulation caused the current fiasco when, in fact, the main culprit is the easy credit policy demanded of banks and other lending institutions so as to "level the playing field" for everyone. (Of course, if by "deregulation" is meant taking off the legal protection of contracts and property rights, then, yes, "deregulation" is reponsible!) Instead of enabling minorities and groups whose members had experienced injustices and economic setbacks in the past, by means of freeing up the economy as fully as possible, the political class tended, in the main, to embrace the idea that handouts, special breaks and privileges, including easy credit, would be the proper way to "help." It never is, of course, but it can postpone the chicken coming home to roost. For a while by stealing from Peter so as to support Paul, which can appear to be effective but, in time, Peter will not take it anymore.

These elementary lessons of the vitality of freedom--in this case vis-à-vis economic health--keep being rejected and even outright distorted by statists around America and the world. Because it isn’t simple to trace out the chain of causation when disaster finally hits, many people keep repeating and get some mileage out of their anti-market message. (A perfect example is Naomi Klein’s The Shock Doctrine: The Rise of Disaster Capitalism [Metropolitan Books], which is a vicious, irresponsible attack on the late Milton Friedman and his defense of the free market and which gained equally devastating reviews in both the libertarian Reason and center left The New Republic.)

What is really sad is that nearly all those who have been most instrumental in precipitating the current economic fiasco are walking around telling lies with virtual total immunity. It is very much like all those Soviet communists who got off scot-free after the fall of the USSR and are continuing to mess things up for Russia and the former Soviet colonies with their influence on how history is understood there and how public policy is forged.

Instead of going after the political criminals, a great many pundits and academicians are slandering freedom and keep asking for more of the same, namely, government meddling. The famous bailouts, for example, were perpetrated by those folks but despite their total failure, the perpetrators are still running around trying to manage the economy. The chorus of those who understand how ineffectual the government measures are and how much they make tings worse is too small and hardly gain a hearing in the mainstream forums where the problems are being talked about.

I know what I must do in the light of all this. I must continue to try to educate folks to the superior value of human liberty and how it is the only hope for bringing about recovery. Maybe you can help me.