Friday, October 03, 2008

Once Again, They Lie

Tibor R. Machan

Anytime I run across some piece of writing that contains the assertions that the world, especially the United States, has been in the grips of market fundamentalism or the doctrine of laissez-faire capitalism, I tend to drop everything and pen a firm response. It's a lie, nothing less. Take the case of Ryan Blitstein who has written, in the course of a review of a book in the magazine, that "America now faces the blowback from 40 years of political dominance by right-wing market utopians, who championed extreme industry deregulation only to increase government's size and power." Mr. Blitstein blames this on the late Professor Milton Friedman, the Nobel Prize winning economist who did, indeed, champion the free market capitalist economic system.

But Friedman was anything but very influential in his efforts. Indeed, over the years that he has argued for freedom as against government planning and direction of the economy--through the various ways that is done and advocated by believers of the wisdom and virtue of government officials--the various political groups that have governed have been less and less committed to free market capitalism. And Blitstein acknowledges this but then still insists that what is at fault is the free market. Never mind that he himself admits that no such things has existed since the New Deal at least, if not since the establishment of the Federal Reserve system around the turn of the century.

Blitstein keeps talking about hypocrisy but the only hypocrisy that he can identify occurred among politicians and champions of greater and greater scope for government involvement in the market place. Friedman and other supporters of the free market, such as Ludwig von Mises, F. A. Hayek, James Buchanan, and even Alan Greenspan--who has always supported the free market but was willing to try to work with the politically more palatable mixed economy--never endorsed big government, certainly not a government with the humongous scope of authority that most politicians champion. All the free market advocates I have run across over my 45 years of interest in political economy have been severely critical of the provisions of the welfare state and the impossible mixture of capitalism and socialism. They have repeatedly warned about what will happen in time if this kind of public policy is continued.

Of course, there are ways to postpone the inevitable, mostly by printing money and placing the burden of the nation's debt on yet unborn future generations (who are not here to protest and to vote their interest). But in time one simply cannot get blood out of a turnip, nor even fake to be able to do so. Politicians, of course, keep promising that they will do just that because that is how they gain office, by fooling their constituents into thinking that they are magicians. With more and more government involvement which produces worse and worse public policies and economic consequences, the politicians and their cheerleaders simply postpone the fiasco that we are now experiencing. But, sadly, most voters keep thinking, these politicians can perform miracles just by wishing to do so.

One group in society that hasn't faced up to its systematic malpractice is the liars who keep blaming the mess on human liberty--if you do not treat people like children are treated by their nannies, they will cause havoc. Well, some will, and there will be some havoc. But if you leave it all for government to fix, the havoc will be of fare greater scope than anything that market failures, so called, tend to create. Markets are, in fact, self-correcting pretty soon after the mistakes made in them come to light. Enron is a good example of this. But when the market is undermined and politicians pretend to be able to square the circle, then all hell breaks loose.

People like Bryan Blitstein are the ones who are mostly responsible for Americans failure to learn economic realities. But they will not fess up to this, not unless they are repeatedly called on their intellectual misconduct.

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