In “The myth of free markets,” (Student Life, April 7, 2008) your columnist imagines that recent U.S. government responses to unpleasant global market conditions emanating from mortgage structuring represent a “strong rebuke to libertarian economists.” He lumps said economists with “ideologues on the right.”
Of course, all libertarians think that the opposite is true, that all that has transpired has demonstrated that only libertarian economics works, that the ideology that has been rebuked is that of the State-controlled, Federal Reserve-mixed, economy-regulation-based approach, which allowed all of these problems to develop on its supposed “watch.”
Since the author gives no evidence as to why libertarians are wrong, I don’t feel obligated to offer reasons why the present system is in fact the failed one. Accept my promissory note: It is.
I don’t find your columnist’s position very interesting. It’s the same one repeated daily in the opinion pages of the New York Times: We need the government to save us from the criminality of business. I do find the structure of his article intriguing. It’s mostly just a recapitulation of what happened in the markets. I skipped over that part. It ends with a small jab at Henry Paulson.
The entire meat of the article is centered in the first three paragraphs and the title. The affect is essentially a smear. Who is smeared? Free markets, libertarians and Adam Smith’s invisible hand. Nothing else in the article has anything to do with these individuals, movements or economic structures.
The reference to ideology caught my eye, since everybody knows that big ideological questions are over. From now on our reality will be constructed around the opposition between liberal democracy managed by brilliant technocrats (expert American political managers of social life) and fundamentalist fascists (the Arabs).
Strange, then, that your author identifies libertarians with the right, since the only political groups who oppose the consensus that no other political structure besides a right-left liberal democracy dichotomy is feasible are Marxists and libertarians, both of whom mock “liberals” and view them as the true enemy and enabler of exploitation. (See Slavoj Zizek’s speech here last month.)
Notice that the author (who on Facebook supports something called “free trade,” and also self-identifies as a liberal) does not mention “capitalism,” but simply states his opposition to FREE markets. Why? Because resistance to global capitalism-in the Marxist sense-is as laughable today as the libertarians who come along and offer to replace the coercive State with consensual arrangements between individuals.
The whole discourse that asks, “Should we regulate the markets more or less?” is not one that takes place within a market of ideas, i.e. in philosophy, academia, etc. It is the discourse of fine-tuning the machine. It asks, “Who is the best engineer, Obama, McCain, or Clinton? Who knows how to pull the levers and turn the cranks in just the right way?” It requires bureaucrats and political strategists manipulating the public.
Real ideological debates-are the libertarians right? are the Marxists right?-have been foreclosed long ago. Why is there a compulsion to mention libertarians, who represent no foreseeable threat to the status quo of global politics (besides probably trying in the future to take over New Hampshire and secede)?
There exists a more perplexing question. Where is this “free market” that needs to be attacked? Where does it exist? Isn’t that the libertarians’ point? Free markets, free trade and laissez-faire capitalism have never been realized. Libertarians claim that this is the key to realizing the benefits of their system: Moving toward privatization doesn’t do anything special, and as it’s done it’s just another form of regulation. They want to eliminate every regulation, the entire State.
Business interests do not want free markets, as the Times points out in its article, “On Paper, Wall Street Gets Its Way.” It concludes, “the sweeping overhaul of the system overseeing the American financial system…could hand Wall Street investment banks a major victory in their years of effort to streamline regulation.” It adds, “many on Wall Street applaud those proposals.” “I thought it was a major step forward,” Thomas A. Russo, chief legal officer of Lehman Brothers, said of the proposal.
The Forum article states that “the belief in a free market is a politically expedient ideology abandoned at the earliest convenience.” Of course. Whose expediency are we talking about? The Obamas, Clintons, McCains, and Bushes of the world. But what does that have to do with the libertarians, who never abandoned it, and who have never held power?
Steven is a senior in Arts & Sciences. He can be reached via e-mail at [email protected].