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Wednesday, December 24, 2008

Arianna Huffington: Laissez-faire capitalism should be as dead as Soviet Communism

Arianna Huffington, founder of the Huffington Post, has an ascerbic piece in Real Clear Politics detailing why belief in laissez-faire capitalism should be as dead as belief in Soviet Communism.

It's time to drive the final nail into the coffin of laissez-faire capitalism by treating it like the discredited ideology it inarguably is. If not, the Dr. Frankensteins of the right will surely try to revive the monster and send it marauding through our economy once again.

I don't mind the criticism, really, even if I think it's false. I'm still hanging on tightly to what Huffington calls free market fundamentalism. I'm still convinced that the right explanation for the recent economic collapse has much less to do with the incentives and pressures operating in a free market than the incentives and pressures created by various and sundry regulations and government actions. Plenty of good analysis is out there from the free market perspective (Cato, for example, did some fine yeomens work here).

What I do mind, however, is silly criticism. Criticism like, for example, the thought that the George W. Bush administration was a free market administration. No, Arianna, Bush & co. were as free market as Pierre Elliott Trudeau was free market. Bush & co. were as much in favour of small government as Martin Luther was in favour of Roman Catholicism. (See here. And here)

And trotting out Alan Greenspan, the former Fed-in-Chief, as a man who has "seen the light" and become a newly-minted fan of government regulation is also a bit much. Of course Greenspan changed his mind when he got offered a fat salary and high priest status. It's hard not to decide that more government is the solution when you benefit a great deal from more government intrusion. If you're busy pulling the levers of power, it's hard not to decide that it's important for there to be more levers for you to pull. More levers is more power, and more power tickles our evolved psychology.

Still, Huffington's piece is well worth the read. It's a stark reminder that we shouldn't be dumb about who we support politically. Policy should be normative for casting our ballots; not character, personality, or stupid partisanship. Since Republicans are associated with free market, small government conservatism, it's free market, small government conservatism that suffers when Republicans grow the government, increase regulations, and act contrary to the principles of free markets and small government in general.

h/t Instapundit

Posted by P.M. Jaworski on December 24, 2008 in Economic freedom | Permalink


The woman is herself a propagandist of the old school type. She'll probably tell you laissez faire capitalism doesn't work or is a failure, when the fact is, its never been done. Her kind do very well with the present system and laissez faire would probably not treat her kindly.

Posted by: JC | 2008-12-24 3:38:20 PM

JC has it right. Funny to claim that something which has never been allowed to exist does not work. While it is true that communism has never worked, that has not stopped the West from adopting much of it, such as central control of the economy and wealth redistribution.

Posted by: Alain | 2008-12-24 4:20:43 PM

What I think is a good thing is that the left is not calling for socialism of any real sort, but simply welfare statism and regulation. I don't even know if the far American left favors the type of Eurosocialism that they are used to across the ocean in the Labour Party of the UK.

But one response to such people who say that the free market is a dead philosophy is, where would you be without the free market? Perhaps, just maybe, we'd lose 40-50 years of economic growth and have the worst depression ever taking us back to 1950. But then who cares? We wouldn't have ever gotten here in prosperity if it wasn't for the innovative spirit of the free market. If Reagan hadn't cut taxes, and Clinton hadn't kept them low, then we'd have a fraction of the jobs we have now.

Ditto for Canada. If it wasn't for Mulrooney and NAFTA, there would not nearly be this much growth going on in a country with a population 1/10th of the United States.

Posted by: Omar Abu Hatem | 2008-12-24 4:32:06 PM

Ditto for Canada. If it wasn't for Mulrooney and NAFTA, there would not nearly be this much growth going on in a country with a population 1/10th of the United States.

Posted by: Omar Abu Hatem | 2008-12-24 4:32:06

Good points Omar,
Still I have to wonder...
An artificially stimulated and overly regulated economic system has indeed made for unbounded growth and development here in the west. In the shortest period of industrial boon in the history
of the planet, we have most assuredly been able to produce all we could possibly want and more.
The problem is that the system itself is basically a bubble, or an economic cycle if you prefer. It has a beginning and an end, and then it collapses. And what we have been doing is rebuilding on the same economic foundation every time it happens, only to be astonished when it collapses again.

What I'm getting at is this;
If our system of government was uninvolved in the day to day business of individuals and industry and free trade truly was "free trade" we might well have built an economy that was as entrenched and steady as nature itself. In fact with the responsibilities that come with real property rights we might have also developed a situation which naturally provides for better stewardship of the land and resources. Family businesses could go on for generations.

So while Mulroney might have been the talking head of the day when NAFTA was being put in place, he was still representative of a system which is inherently flawed.
I believe we are about to see something akin to the Great depression of the 30s which had the dead hand of government all over it.

Your thoughts?

Posted by: JC | 2008-12-24 8:56:22 PM

We all know Arianna Huffington is full of shit on this issue. Is she as ignorant as she sounds or is she consciously evil and knows damn well laissez faire is nowhere to be found and she prefers to repeat the lie to reinforce her role as an obnoxious poseur on all things political?

Posted by: John Chittick | 2008-12-26 7:15:30 PM

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