Monday, October 13, 2008

Whistling in the Dark

Tibor R. Machan

It is hardly ever disputed among honest political economists that most Western countries, including the United States, are welfare states or mixed economies. Unlike, say, a fascist or socialist country, in a relatively free society if a substantial number of voting citizens champion a system that undermines the very liberty that makes it possible to have an influence in how the country is governed, the country is going to reflect this fact in its public policies. Under socialism, which is a planned society--especially when it comes to its economic features--or fascism, which is run by some charismatic leader, opponents tend to be officially silenced. The more the system is socialist, the more such silencing takes place. The same with fascism. Unity is crucial for both of these political organizations and when such unity is believed by the leadership to be threatened, dissent is squelched.

But in countries where political participation is deemed to be a basic right, it isn't customary to silence opponents. At most a kind of compromise is achieved among the various political factions. It is very rare that some given political idea succeeds at dominating public policy. Accordingly, a mixed economy is exactly that, a mixture of various conceptions of how the economic affairs of the country ought to be governed. Some parts of the economy will be substantially, maybe even totally free of government regimentation or regulation. Consider the market wherein pottery is being produced, sold, exported, imported, etc. It isn't subject to much government meddling. Or posters or hats. And this could be the case for many other goods and services, although in an integrated economic system regimenting or regulating one sector of the market will tend to have an impact on the rest. What is pretty much guaranteed, especially where no strict constitutional protection of free trade exists, is that there will be no system-wide socialism or capitalism or fascism in play but, instead, all these and some others will somehow coexists and champions of every one will advance and retreat in their respective influence on the country's economy as a whole.

It is, therefore, a foregone conclusion that those who assert that a mixed economy has become fully socialized or is completely laissez-faire are engaging in hyperbole. When a columnist for The New York Time, the author of some book on public policy, or a letter to the editor writer says that the philosophy of free market capitalism has become the ruling ideology of the country and is responsible for our ills, they cannot be telling the truth and they must know that they aren't since no genuine free market system exists. Furthermore, it is inherent in the mixed economy that it is, well, mixed. Perhaps in one or another era one or another part of the mixture can be more pronounced. And, certainly, one or another part of the mixture of a mixed economy could find more vocal champions supporting it. But unless these champions manage to change the basic law of the land that give legal backing to its mixed character, their position will not dominate.

So when it is asserted that the American economy is based on market fundamentalism--or, indeed, on any other pure idea of economic organization--this cannot be right and is very likely done for a purpose other than to say what is in fact the case. As the English linguistic philosophers J. L. Austin argued, there are goals apart from stating the truth that we pursue when we offer various utterances. In his wonderful little book, How to Do Things With Words? Austin identified, among other such goals, the influencing of people's beliefs and even actions. Thus, for example, there are what he called perlocutionary utterances whereby those making the utterance want to make others do certain things they deem to be important. But they want to achieve this influence in a roundabout fashion, not directly, mostly by pretending something that is false, namely, that the welfare state is a well functioning system of political economy.

I am convinced that when opponents of free market capitalism charge that America has been in the grips of market fundamentalism, they don't mean to say anything that's true. Rather they want to influence others to act in certain ways that such utterances are likely to encourage. They want to belittle free market capitalism by associating it with various disagreeable aspects of the American economy, one that is anything but fully capitalist but rather highly regulated, highly interfered with by the various levels of government.

Please do not fall for this trick. A great deal depends on repelling it, especially when perpetrated by prestigious people and prestigious institutions.

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