You really can't understand it Kevin, or is it you don't want to accept the truth.
THE seminal question with libertarianism is to what extreme? Because if taken to full extreme in is most certainly 'freedom' and 'liberty', but it is the 'freedom' and 'liberty' of jumping out of an airplane without a parachute. It ends very poorly.
I can understand it perfectly fine, and whether or not it's the truth depends on your own ideological stance. I can obviously point out that libertarians, who have no political power in the United States, and their political and economic views, generally Austrian free market economics, cannot possibly be to blame for the "present malaise." That's simple logic. No libertarians in power and Austrian economics not being anything close to the dominant economic view in the past century means that they can't be at fault.
As an icon of the right former president used to preface his comments: "Well..." you're wrong Kevin.
Although no one from the libertarian party has been elected president,
Republicans have certainly practiced and preached the political and economic views of laissez faire, Austrian free market economics and minimal or no government intervention in the market. It is what led to the recent collapse of our economy. It is even the philosophical basis of the egregious right wing robes Citizens United v. Federal Election Commission ruling.
(more for) Blind Faith
Even our own internal comparisons fail to flatter laissez faire. Over the past half-century we have seen lower tax rates and less government interference. We have come a long way toward free enterprise from the proto-socialist policies of Franklin D. Roosevelt. Since the Kennedy Administration we have reduced the marginal tax rate on our highest incomes from the 91% that remained in effect from the 1940s into the mid-1960s (and a brief peak of 94% during World War II) to 28% in the 1986 tax code. Yet our economic growth has slowed.
Decade Average Real GNP per Capita GNP Growth
1960-1969 4.18% 2.79%
1970-1979 3.18% 2.09%
1980-1989 2.75% 1.81%
1990-1994 1.95% 0.79%
Despite our adoption of the most enlightened free market policies, our performance resembles that of a declining Great Britain in the late nineteenth century. Britain soon lost what early lead it possessed. Industrial production, which had grown at an annual rate of 4 percent in the period 1820 to 1840 and about 3 percent between 1840 and 1870 became more sluggish; between 1875 and 1890 it grew at just over 1.5 percent annually, far less than that of the countrys chief rivals
finally, British industry found itself weakened by an ever rising tide of imported foreign manufactures into the unprotected home market the clearest sign that the country was becoming uncompetitive. (Kennedy, The Rise and Fall of the Great Powers, p. 228.)
Although our government policies have been increasingly laissez faire and increasingly friendly to corporate America, our investment, productivity and economic growth have all lagged. Similarly, as the world has moved toward purer capitalism, worldwide economic growth has slowed. From 5.5% in the 1960s, world GNP growth declined to 3.4% in the 1970s, 3.2% in the 1980s, and further in the 1990s. (Maddison, Monitoring the Worlds Economy 1820-1992, p. 227.) It is likely to decline still further in this first decade of the new millennium.
It may seem odd, given the parabolic arc of our financial markets and the swelling chorus of paeans to free market economics, but despite the important role of the market, purer free market economies have consistently underperformed well-focused mixed economies. In the latter part of the nineteenth century the mixed economies of Meiji Japan and Bismarcks Germany clearly outperformed the free market economies of Britain and France. Our own economy grew faster when we abandoned the laissez faire of the 1920s and early 1930s for the proto-socialist policies of Franklin D. Roosevelt. It has become increasingly sluggish as we have moved back to a purer free market. Data of the past few decades show that our GNP and productivity growth have lagged those of our trading partners, who have mixed economies characterized by moderate government intervention.
The persistently mediocre track record of laissez faire casts doubt on the claim that an economy free from government interference invariably maximizes the wealth of society. In fact, there are sound reasons the pure free market must underperform well-focused mixed economies.
But despite laissez faires mediocre track record and despite powerful arguments that it cannot possibly provide what it promises, the notion of the unqualified benefit of the free market has become deeply embedded in our mythology. Apologists have exulted in claims that glorify free market mythology at the expense of reality, and also at the expense of society. Free market principles, even though they have failed in economics, have been eagerly applied to sectors ranging from politics to education, where they have contributed to societal dysfunction.
One politically popular myth, that free market economics and government non-intervention provide the basis for true democracy, flies in the face of history. The first democrats, the classical Athenians, had a word for the ideal free marketer, the homo economicus, working for his own economic gain but unconcerned with the community. It was not particularly complimentary, the ancestor of our word idiot. Pericles expressed the sentiment underlying this: We regard the citizen who takes no part in these [public] duties not as un-ambitious but as useless
We have ignored the ramifications of this as we remodeled our pantheon. We have replaced the notion of public-spirited citizens interested in the common weal, a vital part of democratic thought from ancient Athens to our founding fathers, by the invisible hand of the free market. This promises to maximize benefit for society, if only we will be idiots.
In so far as it fails to value disinterested public spirit, free market doctrine only pretends to cherish democracy. Let the people concentrate on their economic gain while their leaders rule in any manner they choose. The Peoples Republic of China instituted free market reforms to sustain its autocratic political regime. Augusto Pinochet brutally repressed even mild political dissent while pursuing free market economic policies in Chile.
The reality of our own political power structure is that despite the primacy of our financial markets and our contemporary rituals of democracy, powerful corporations, unions and special interest groups fund political campaigns and exact repayment in the form of enormous influence on legislation. Our government is responsive primarily to these organizations, rather than to citizens. This resembles the corporatism of Mussolinis Italy more closely than any historic democracy. We are blind to the connection between corporatism and the lack of public interest in politics and in the common good.
In our enthusiasm for the dogma that any government interference is necessarily bad, we forget it was government action that ended child labor. It was government action that outlawed slavery, despite its profitability. It was government action that ended the Great Depression, after years of failure of nonintervention. It was government action that curbed the most virulent expressions of racism, that provided an education for the great majority, that created a large stable middle class. The free market did not achieve any of these goods, and there is no indication that it ever would have done so.
This is not meant to imply that everything government does is beneficial. But to start from the faith that everything government does is necessarily harmful not only disregards history; it sacrifices the ability, and even the interest, to distinguish between the beneficial and the harmful.
Just as the value of government needs to be assessed independent of dogma, the value of the free market has to be gauged in the real world. Free markets provide incentives for innovation. They enforce pragmatism at the expense of ideology. They fit production to needs and desires of consumers and they lower the price of goods. But free markets can also cause problems. Some of these stem from the pre-eminence of the short term. This endangers long-term prosperity.
Independently, free markets encourage an extreme concentration of wealth that has historically destroyed the fabric of society and led to a lower standard of living for everyone. Government intervention may be our only defense against the natural economic forces that lead to such a concentration of wealth. But the prevailing libertarian/laissez faire credo, even though it may be held by intelligent and well-meaning individuals, blinds us to both the danger and the potential for any response that is not generated by the free market itself. Our beliefs, despite the sincerity with which we hold them, lead us astray.
