Both Dr. George Reisman and I are unhappy about what some critics of our current economic crisis are saying. In his article “The Myth that Laissez Faire is Responsible for our Current Economic Crisis,” Dr. Reisman faults those who are blaming laissez faire policies, since our economic system falls short of the laissez faire ideal. The past few entries on The Middle Class Forum have argued that this ideal is unattainable, because of the inherent conflicts involved with defining both corporations and people as individuals whose economic freedom government must protect. On the other hand our economic system is closer to a laissez faire ideal now than over thirty years ago; this increased commitment to the laissez faire ideal should be considered integral to the economic system we have now.
In contrast to Dr. Reisman, I am unhappy about how often I hear critics cite free markets for having failed. We do not have free markets, at least not when an exchange involving a corporation is involved. The practice and even mere existence of business corporations is inconsistent with some or all of the free market ideals of independence from government, unexploited labor and the free flow of pertinent information affecting market exchange. No business corporation has existed without being suckled by a nation state since they first coevolved.
Free market capitalism is an oxymoron as long as capitalism is equated with business corporations. So, too, is laissez faire capitalism. This is not the only similarity drawn between free markets and laissez faire. Sources such as Wikipedia even equate laissez faire with free markets. This is a dangerous bit of misinformation that needs correction.
Thus when bad times cause the middle class to cross-examine our faith in laissez faire capitalism our faith in free markets is shaken as well. Alternatively, if our uninformed faith in free markets remains strong enough the propaganda of Puppet Libertarians and the Powell Cabal can persuade us to continue our a commitment to laissez faire capitalism even as the economy falls apart. A false dichotomy between socialism and laissez faire capitalism is set up at the ultimate expense of understanding what a free market even means. If the misinformation network has caused us to lose even the meaning of free markets we have lost that as an ideal to hold up for improving our economic system.
I agree with one other thrust of Dr. Reisman’s article. The government backed expansion of credit led to a significant gap between capital and productivity that could not be overcome to prevent the current crisis. We differ in that he sees this as something out of the ordinary, rather than just a different variation of the protections, licensing, infrastructure, fiscal policy, etc. that nation states always provided business corporations since their very creation. We also differ in that Dr. Reisman seems to be ignorant (a term he loves to use) about thirty year trends that are incriminating for laissez faire policies that were implemented during that time span. His ignorance of empirical data comes as no surprise, given the following statement in his article:
“Very few of the professors and their students have read so much as a single page of the writings of Ludwig von Mises, who is the preeminent theorist of capitalism and knowledge of whose writings is essential to its understanding. Almost all of them are thus essentially ignorant of sound economics.“
Ah yes, a good scholar through and through, worshiping the idol at the head of his school of thought. You don’t need empirical evidence to get in your way when you have that going for you. You can just picture Dr. Reisman sitting at the feet of Plato with starry eyes listening to the virtues of reason alone. For the record, I have read more than a single page of Ludwig von Mises, though by no means am I a devoted scholar (or an economist, for that matter). I would like to read just once, just once mind you, an acknowledgment by some laissez faire apologist how capitalism, corporations, colonialism and nation states all coevolved and there is no empirical evidence to date that the first three can exist independently of the latter or of each other. I understand how they should exist independently as theory/dogma, but only when great laissez faire scholars such as Ludwig von Mises acknowledge the empirically evident codependence will I consider their scholarly fantasies of independence seriously.
Dr. Reisman rails against the Marxist tendencies of professors and students, as well as media and leaders, faulting laissez faire capitalism. The empirical evidence shows that business corporations fund endowed chair of economics at prestigious universities; no “Marxist” entity does likewise. The empirical evidence shows that there are a good many more laissez faire think tanks like the Ludwig von Mises Institute than “Marxist” counterparts. The empirical evidence shows there are a good many more laissez faire special interest groups like the U. S. Chamber of Commerce devoting hundreds of millions of dollars lobbying Congress than “Marxist” counterparts. The empirical evidence shows that corporations are sympathetic to the message of these think tanks and special interest groups. The empirical evidence shows that corporate owned media invites pundits from these think tanks and special interest groups more than “Marxist” counterparts. Yet we are to take the word of the good scholar Dr. Reisman that we suffer from a misinformation network out there attempting to persuade us of their “Marxist” dogma. If the “Marxists” are winning the misinformation battle despite the vast superiority of laissez faire resources, perhaps that’s an indicator that the laissez faire folks are a bunch of incompetents we should not be following.
I just wish the laissez faire scholars would stop dragging the reputation of free markets down with their dogmatic incompetence.
Tags: Economic Misinformation, Interest Groups, Middle Class Economics
