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vastleft's picture

In Predictably Irrational, Dan Ariely (whose current blog post might strike a chord with us economic-equity types) states:

"If you accept the premise that market forces and free markets will not always regulate the market for the best, then you may find yourself among those who believe that the government (we hope a reasonable and thoughtful government) must play a larger role in regulating some market activities, even if this limits free enterprise."
I thought that sounded reasonable enough, but when I searched the quote online, I mostly found references that mocked...
What a maroon! He takes his unproven assumption as fact and says that that makes the current (mostly) free market incapable and unreliable, and therefore the government must step in and control things because in its wise beneficence it can take all factors into account reasonably. He’s living in a dream world. He believes the government is the source of what is good and right. Why he believes this, why anyone would believe this, is beyond me.
... this idea:
If Ariely has one weakness, it's when he recommends solutions to the behaviors he seems, which mostly seem to involve government. One of his biggest whoppers: "If you accept the premise that market forces and free markets will not always regulate the market for the best, then you may find yourself among those who believe that the government (we hope a reasonable and thoughtful government) must play a larger role in regulating some market activities, even if this limits free enterprise." Ariely himself finds the flaw in his prescription, yet still recommends it!

Well, I noted, these comments were before the Big Shitpile hit the fan. Surely, as Krugman observed, there are no libertarians in financial crises. But in looking up that quote, I see that Krugman is in fact wrong. Waist deep in the Big Shitpile, and the damn fools say to push on:

Krugman in typical fashion communicates his point in a smug fashion and implies that only someone completely bonkers would maintain a libertarian stance. But the reason we are in this mess to begin with is because we weren't bonkers enough to pursue libertarian economic policies. Instead, statist intervention in financial markets has been pursued for decades. Government policies that privatized profits, but socialized losses; easy credit monetary policy; regulations which favored some groups at the expense of others, etc. all created our current mess. NOT free markets, and only free markets will permit the adjustments to economic realities that are required to get the market economy back on-track.

I don't know about atheists in foxholes, but I do know that only economic libertarianism can get us out of the mess of political capitalism we are currently in. To argue otherwise, as Krugman and his crowd do, not only belies a fundamental lack of economic understanding, but an innocence of public choice.

What's curious is that sane, progressive governments are adjudged to be a pipe dream, while perfect libertarian societies are presumed to be fully achievable.

Note: About that "Krugman quote."

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badger's picture
Submitted by badger on

of libertarianism is that "government can't do anything as well as free enterprise", which is essentially what the critics you quote are saying.

Here's a simple empirical test you can perform every spring and fall to see if government or private enterprise is more effective: follow the college football rankings or the NCAA basketball tournement. If private enterprise is more successful at delivering benefits, then the top ranked teams or NCAA winners will be private schools far more than public schools will be.

Note that both college football and basketball are multi-billion dollar enterprises when you count TV contracts, merchandising, ticket sales, scholarships granted or capital investment in facilities and players. College sports is a substantial industry. Moreover, the best players are perfectly free to choose to align themselves with the supposedly superior private institutions over the inferior public schools. And the regulation is done by a private, voluntary membership body.

If private schools don't monopolize the top 10 football rankings or dominate the Final Four nearly every season, there's something clearly wrong with the idea that private enterprise is more capable than government-backed enterprise.

Aeryl's picture
Submitted by Aeryl on

All colleges that participate in the NCAA have to abide by the same rules for recruiting and the like, so they are still on an even ground.

If you look at the high school level, here in my hometown, you see a big diff in the public vs private schools.

The private schools can offer scholarships to athletes, where the public schools can't, the private schools can recruit, while the public schools have to deal with the students who are assigned to them.

And the private schools almost always grab the title.

That's the arguments that libertarians almost always make, is that free enterprise is more capable, because it faces less restriction and red tape. And in the case of sports, it's actually true, so I don't think that is an argument you want to make, if your trying to argue for more government, instead of less.

badger's picture
Submitted by badger on

If you handicap government, as in your HS sports example, it isn't going to perform as well as free enterprise* at least some of the time. All that proves is that if the rules are skewed to favor one side, that side will do better. So what?

Government doesn't equal restriction, as the college sports example demonstrates. Government represents a common effort to achieve the common good. Conservatives and libertarians want to drown government in the bathtub and then say "Look! We told you it wouldn't work!". That's just intellectual bullshit.

*Actually, I can cite examples where, even handicapped, government run enterprises still beat private enterprise by a wide margin.

Aeryl's picture
Submitted by Aeryl on

That is the argument most libertarians are making, that government is so hamstrung by rules and regulations, the private sector can do it better. They seem to believe that the rules do benefit the private sector, hence...

I'm not saying I disagree with you. It's just the examples you provide are of an enforced even playing field. No libertarian I know wants to enforce an even playing field. So that might not be the best example, using regulated sports.

Those examples of government still performing better, those are good examples.

badger's picture
Submitted by badger on

I haven't bothered listening to libertarians for years - a long time ago and for a long time, that was almost the only politics you could find online. I guess sometimes things do get better.

I have the impression of libertarians believing that government, by its very nature, whether hamstrung with rules or not, is fundamentally evil and incompetent - which is demonstrably false. It's not hard to come up with anecdotes where government is evil and incompetent, but the scale of the current meltdown of the private sector and "free market" kind of makes most of those instances look pretty trivial. Even the governor of IL is small potatoes compared to Maddoff.

But way back when, libertarians were all in favor of parties associating voluntarily being able to enforce virtually any kind of Draconian agenda amongst themselves that they could dream up. For example, employees losing any rights at the factory gate or offfice door, or even debtors selling themselves into slavery. And the NCAA is a perfectly voluntary organization of the kind libertarians used to think admirable - just like the private courts and police forces some of the more extreme advocated.

Being a University of Wisconsin football fan of sorts, it's hard to swallow that the playing field is that level, given the way MI and OSU have dominated the Big 10 for 50 years or more.

HeroesGetMade's picture
Submitted by HeroesGetMade on

It sounds like Ariely is questioning the wisdom of it not being the government's job to choose economic winners and losers. I forget who said that recently, but it does beg the question of who should do that choosing, because for sure, there will be winners/losers in the meltdown. Since government represents mostly the monied and not the rest of us, I agree that it's improper for them to do the choosing - I do not trust Hank or his golfing buddies. It's also apparent that about the only source of money for bailouts is We the Taxpayers, so maybe We the Taxpayers should choose the winners/losers? Personally, I think examples should be made of some of the people who caused the meltdown, preferably ones that won't cause serious job losses.

I'm also intrigued by the possibility of using the meltdown to remake the economy for good as opposed to evil ala Klein's Shock Doctrine. The meltdown is an opportunity for something new instead of the same ol disaster capitalism.