Myths Are Born This Way

Tibor R. Machan

Education is filled with more or less accurate accounts of what is what, including human (American) history. Various champions of systems of ideas eagerly work to capture for themselves the stories that bolster their doctrines. This is one reason so many prominent statists are relentlessly spreading the lie that our current economic fiasco is the result of market forces—of the free market, capitalism, free enterprise, the unregulated market place, and so forth.

If they are successful in spreading this rank distortion, they secure for themselves and their ideological brethren a greater chance of ascension to political power, which is what statist desire most.

Defenders of the free society haven’t any political power at stake in the debate about how the fiasco was produced because in no case are they going to gain, for among other matters they do not want, political power. What such folks are after is the truth and the reason is that with the truth comes, in this instance, a more prosperous and more just political economy.

Yes, defenders of the market are also quite self-interested in this matter for they know that everyone’s lot has a better chance of improving when freedom reigns in a society. No, there is no guarantee that freedom will make us all happy and successful in life. That utopian dream is only peddled among the dishonest promoters of statism since with the state’s rise to economic power we are all supposed to do well. All one needs to verify this is to listen to the likes of Barack Obama, Paul Krugman, Robert Kutner, et al. They are all advocates of greater government power over the economy for the purpose of solving our economic problems, problems that stand in the way of the country’s flourishing. With sufficiently huge stimuli plucked out of thin air and dumped into the American, indeed, world economy at various points, everyone will be happy and, especially, equal justice will be served big time.

Free market advocates cannot make this promise because they know that none has the power to deliver such a result to millions and millions of human beings in a highly complex and uncertain economic environment. Sure, free market advocates do argue that free men and women are more prone to prosper since they are, naturally, free to turn their careful attention to their economic prospects. But that has never been a guarantee of triumph over unforeseen obstacles; it is merely the best chance of overcoming them.

So what is one to make of a letter such as this one in the International Herald Tribune (3/14-15/09): “David Brooks gives Republicans sensible advice. But for all of Brooks’s honesty, we could wait forever and neither he nor the Republicans will own up to how they overestimated the power of market forces”? We can tell that it is a clear illustration of the attempt to distort history. After all, there have been hardly any genuine, bona fide market forces at work in the American economy for decades now, not since the federal government basically seized the reigns of American finance back when the Federal Reserve Bank was established, since the dollar was destroyed as a sound currency, and since all those alphabet soup federal agencies began to intervene with the decisions of market agents in every nook and cranny of the economy. Ours, as well as those of all Western societies’ economic systems are mixed ones, plain and simple, with huge doses of socialism and fascism operating within corrupted markets.

So however well or badly “the power of market forces” would do, such forces haven’t been in evidence for honest students of economics to study and track. Instead economic history has been a history of substantially and predominantly statist forces, as they have been throughout human history with but bits and pieces of exceptions in small regions of the world. Sure, prospective market agents will naturally try to turn all of it to their advantage—that’s their job just as most of us attempt to do well in our commercial endeavors—mostly, however, in the messy arena of markets-cum-politics. Yes, the exceptions have most likely produced economic wonders that are denied only by statists who just cannot credit economic freedom for anything good anywhere—such freedom leaves them with nothing much to do! But because of the massive doses of state intervention at every turn, no clear record of how the market is doing can be gleaned from taking some time slice such as the recent fiasco and reporting on it.

There haven’t been clean, undisturbed market forces at work for us to tell just from the record of events what their impact has been on our lives. For that it is necessary to do some very honest and detailed theoretical and historical research. Instead, of course, the statists just keep asserting that the free market is responsible for every economic problem we have which, if believed by enough, will help them gain and keep political power. What free market are they talking about?