Chapter 13
DIFFERENCES WITHIN
The overview just given
of the individualist "philosophy of a free society" may
provide an appreciation for the true liberality and coherence of the classical
liberal outlook. Its coherence doesn't
mean, though, that classical liberals haven't had a number of differences among
themselves. This chapter will touch
briefly on those issues, but will focus mainly on a difference about
methodology. This is important because the
tendency of many free-market advocates to embrace a "closed axiomatic system,"
if they persist with it, will greatly inhibit their ability to give classical
liberalism a form that will suit the world's emerging realities.
One difference has to do with monopolies, restraints on trade, and anti-trust. The most common view among market theorists
today is that there is no meaningful problem of monopoly or restraint on trade
in a competitive market economy unless there is government intervention
favoring one or more competitors. It is
seen not as a problem of the market but of government meddling. The great classical liberal economist Lord
Robbins, however, provided the opposing view when he said "I still
believe, as against Schumpeter and others, that there is a real monopoly
problem in free societies, and that it is unwise to resign ourselves to doing
nothing about it."[1]
The world economic crisis of 2007-9 demonstrated how vital
it is that financial institutions (with their massive capital flows) and the
units of global business be brought down to a size that is amenable to central
bank monetary controls, securities oversight, and other national regulatory
norms. This is more than just a problem of a given organization’s having become
too large. When there are financial
flows of “hundreds of trillions of dollars” that are subject to the vagaries of
herd-psychology, there is a systemic need for down-scaling.
A lesser but still important problem does have to do with
the size of particular organizations. Some
corporations have become “too big to be allowed to fail,” because their failure
can mean disaster for the economy as a whole.
Such a situation is intolerable to those supporters of a free market who
realize how absolutely necessary it is to remove everything that can bring the
market economy down.
The argument that unfathomable capital flows and
transnational corporate webs are essential to continued innovation and
successful competition within “the global market” ignores two things: the
on-the-brink prospect of disaster they bring with them and the fact that
innovation can proceed apace without such scale. All of this makes the argument for Lord
Robbins’ outlook particularly strong.
A second difference relates to monetary policy. Many laissez-faire proponents favor the gold standard. Milton Friedman, whose economic thinking
towered over classical liberalism for several decades, long supported a fixed legal
rule for a gradual increase in the quantity of money by the Federal Reserve
Board. Mises and Hayek favored
"free banking," which would have banks themselves decide about
lending and money-creation under what they presumed would be the watchful
discipline of the market. Yet another
approach, favored by Lord Robbins, is to require banks to have a 100% reserve
for deposits, which would totally remove banking's money-creation aspect.
Again, the 2007-9 crisis was an eye-opener. The “bubbles” created by the U.S. Federal
Reserve first in the stock market and then in housing were the result of a
rapid expansion of the money supply.
This expansion was obscured because the price level was simultaneously held
down by two things: the huge quantities of low-cost imports from
In recent years, those who most single-mindedly support laissez-faire have been enthusiastic
for free trade, the global market, and open immigration into the
I want to focus our main
attention, however, on methodological differences. Far from being esoteric, the discussion of
method will be central to the next chapter’s review of a good many conceptual issues that stand
in the way of free market devotees' adapting to the world that is now taking
shape.
If we talk at length with many libertarians, or with others
who also pride themselves as steadfast free-market advocates, or with committed
pacifists, what will strike us most about the conversation? More than likely, the extent to which they
strive for consistency. They have a set
of principles and compete among themselves to be the most purist in applying
them. They consider it a mark of
dishonor to deviate from those principles, to which they are fully loyal. They have the satisfaction of knowing that
they grasp the central kernel of truth that most people overlook. This provides them extraordinary confidence
in their moral position.
I remember a conversation I had with anarcho-capitalist-pacifist
Robert LeFevre at the
A similar approach is made by uncompromising
libertarians. Many start with a set of
moral axioms such as "each person owns himself" and "the
sanctity of private property" and seek to be strictly deductive from
them. No argument seems fully to the
point that concerns itself with whether an economic or social model results
that most people would consider workable.
The late Milton Friedman did this when he argued that such a natural
treasure as the Grand Canyon should be privately owned rather than be part of a
"commons."[4] (Friedman did get into subtlety about whether
the private property axiom should apply when he discussed, and then decided
against, the appropriateness of what he called a "neighborhood
effects" exception to the axiom; but he remained faithful to the deductive
approach. That he did so with regard to
the Grand Canyon isn't altogether typical of his thinking, though, since he was
ingenious in devising strategies – such as the fixed rule for monetary
increase, the voucher system for education, and the negative income tax – that were
calculated to accomplish classical liberal objectives while addressing needs
that free-market theory wouldn't otherwise take into account. Friedman mixed purity and practicality. Charles Murray does this, too, in What It
Means to be a Libertarian, where he sets out a series of axioms but also
indicates that he isn't as strict an adherent to them as many libertarians are.[5])
The examples of pacifist or libertarian purists illustrate
any philosophy that deduces strictly from axioms without evaluating
consequences. Thus, we come to what is
perhaps the single most important division within moral philosophy. The sociologist Max Weber many years ago
described two opposing approaches to ethical theory: one holds that "the
intrinsic value of ethical conduct is sufficient for its justification,"
and this contrasts with those who hold that "the responsibility for the
predictable consequences of the action is to be taken into consideration."[6] Lord Robbins made the distinction even more graphically:
"The critical division in social philosophy… is surely between those who
judge laws and institutions in terms of conformity to an abstract scheme of
rights, deduced in some way or other from the principles of pure reason, and
those who judge them in terms of the utility of their consequences – the judgement
being, of course, in terms of rational analysis but the ultimate criterion, as
both Hume and Bentham showed, being something outside reason. It is the division between those who cry ‘let
justice be done, if the skies fall,' and those who would regard the falling of
the skies to be one of the consequences which must be taken into account before
it is decided whether a particular action or a particular framework of action
is, or is not, just."[7]
In my opinion, the system that evaluates consequences
rather than adheres unwaveringly to deduction from axioms is much to be
preferred. The problem is that axioms,
if they are to be used for strict deduction, must contain within themselves a
distillation of all human experience and wisdom, and all preferences, needs and
wants that people, now or at any time in the future, or in any culture or
situation, might feel. Any failure
to include all of this in formulating the axioms, as well as to consider all possible emergencies and
contingencies, will subject the theory to devastating
"counter-examples," which will raise points that people consider imperative
or valuable and that the axioms don't take into account. But it
is impossible to devise in advance a set of axioms that will be so all-seeing.
The core issue is whether all relevant considerations and
consequences are to be taken into account at some point or other. A seductive aspect of the axiomatic method is
that after the axioms are selected the process is intended to be one of pure
deduction, without a willingness to evaluate its results. This is my fundamental criticism of the
axiomatic systems of, for example, philosophers John Rawls and Robert
Nozick. For many proponents of a
deductive system, the conclusions are drawn by rote, with the result being an
unthinking over-simplification.
When I was a young man in the Marine Corps stationed in
Still further, I eventually came to think that the axioms stated
in Emergent Man weren't fully sufficient:
that it is too narrow to make even so desirable a thing as "liberty"
the one and only consideration.
There is even a problem with trying to lay down a universal
philosophy, which is inherent in the axiomatic approach. There are several widely varied civilizations
in the world, and many individual cultures to whom millions of people are deeply
loyal. A theory that ignores such
specifics may think it is a “universal” theory, but it is not. This means that my suggestion of looking to
“western civilization, with liberty at its core” recognizes that it is a
philosophy that is fitted specifically to a given civilization, not to all.
None of this should be taken to contradict the fact that
within a given culture or philosophical system there is great value in
formulating principles in light of one’s best understanding, and then thinking
and acting in a "principled" way.
"Principled" behavior is essential in life as people deal with
each other and as they try to avoid all sorts of preventable difficulties. Still further, there are important reasons
for moral principles to be adhered to without everyone's constantly questioning
them, and for the community to enforce them by social pressures. This is because if moral behavior is
important there needs to be an acculturation to make it habitual. People aren't well situated to be
"judges in their own case" (consider, for example, a husband or a
wife's pondering, in a time of temptation or of stress within the marriage,
whether adultery is ever justified) and for each person to be a
philosopher.
If this is so, how is the "openness" to come
in? The answer lies in something that
John Stuart Mill pointed out: that a free society needs an intellectual culture
appropriate to itself. It is within that
subculture, where ideas and theories are seriously considered from a reasoned
perspective, that the openness to new considerations is essential. This involves a certain compartmentalization:
there needs to be openness in serious philosophic discussion at the same time
the society benefits from a culturally enforced ethic. Both needs exist, even though they are at
odds. (The fact that the intelligentsia
of the past 200 years has been deeply alienated from the “bourgeoisie” and a
commercial culture has made it ill-suited for the purpose just stated. An intellectual subculture most appropriate
to a free society will have to be vastly different from the one we have known. It
will necessarily support the norms and ways of life of the mainstream society
while at the same time seeking to critique and elevate it.)
Unfortunately, part of
the conventional wisdom in the
The next chapter will critique the ideas one at a time, showing that they have had a number of
weaknesses. (The flaws were present even
before the emerging technology and global market. They should never have been accepted without
question, and certainly shouldn't be as we go into the future.) In the present chapter, we will review what
those ideas are, laying the foundation for that later critique.
Private property. The existence and rightfulness of private
property is an important starting-point.
In The Law, Frederic Bastiat considered it "a gift from
God" and proceeded with an analysis of the "theft" that comes
from any governmental action that goes beyond the minimal function of defending
life, liberty and property. The philosopher
who served as the main source of classical liberal property theory, however,
was John Locke, who traced it to a person's mixing his labor with nature. In a 1996 essay, Peter J. Hill expressed the
Lockean rationale when he said that "a person whose creative effort adds
to the stock of wealth without decreasing the well-being of others would seem
to have a moral claim to that new wealth."[8] Robert Nozick starts there and argues that
anything that arises out of voluntary contractual dealings with the property is
legitimate.
Ludwig von Mises, though, took an interestingly modern view
that reflected his economic perspective.
He acknowledged that "again and again proprietors were robbed of
their property by expropriation. The
history of private property can be traced back to a point at which it
originated out of acts which were certainly not legal." But he added:
The fact that legal
formalism can trace back every title either to arbitrary appropriation or to
violent expropriation has no significance whatever for the conditions of a
market society. Ownership in the market
economy is no longer linked up with the remote origin of private property. Those events in a far-distant past... are no
longer of any concern for our day. For
in an unhampered market society the consumers daily decide anew who should own
and how much he should own. The
consumers allot control of the means of production to those who know how to use
them best for the satisfaction of the most urgent wants of the consumers.[9]
From this, we see that classical liberals cite various
justifications for private property.
Suffice it to say that it is fundamental to their philosophy. What is meant is the type of transferable
property typical in a market system; it presupposes a legal order suitable to
it. Classical liberals fought, for
example, the medieval principle of "primogeniture" whereby land
passed to the eldest son to maintain aristocratic estates.
Note that the ownership is seen as total, without any notion
that society has even a partial claim upon it because of the social
preconditions for its existence. Henry
George was different. He was a classical
liberal a century ago who said that land existed without anyone's having made
it, and that therefore the rent from it should rightly go into a social fund to
be used for general benefit.[10] Some classical liberals are followers of
George, but they are a minority. Most
have felt that it is better not to dilute the sanctity of private property, so
as not to encourage an incremental destruction of a system that they see as
necessary to individual autonomy and self-sufficiency. I agreed with this myself
under the conditions of the twentieth century during which incremental moves
away from private property were distinctly part of a socialist program, though
never admitted as such in the
The “Act of
Exchange”. In the
non-coercive setting desired by classical liberalism, the "act of
exchange" is a key form of human activity that serves as the
building-block for economic efforts, large and small. Each party to a voluntary exchange values
what he is receiving more than what he is giving up, so each party benefits as
he perceives it. One person's benefit
does not come from somebody else's losing.
Since this is so, exchange is an engine for enormous service to
people. The whole market economy, with
all its features as described by economists, arises out of it. Private property is important to it for
various reasons, one of which is that the exchange frequently involves
property.
UCLA’s William Allen has often made his "Midnight
Economist" radio commentaries entertaining by having one fanciful mouse
talk to another. Here's a good
description of the act of exchange he has made in that context: "Trade is
a very good thing. It must be, for
everyone does it. And no mouse would
participate in exchange if he did not gain from it. No one will trade unless he himself puts a
greater value on what he receives than on what he gives up... An
activity which benefits everyone involved ought not to be curtailed."[11] Jacob Hornberger gives an example that
relates it to marginal utility theory: "Suppose you have ten oranges and I
have ten apples. I value one of your
oranges more than my tenth apple; and you value one of my apples more than your
tenth orange. We trade – one apple for
one orange. Our standard of living has improved
– through the mere act of exchange!
Thus, the more people are free to trade, the higher the standards of
living tend to be."[12] Peter J. Hill puts it more abstractly:
"Under a set of well-defined and enforced property rights, the only
transactions people engage in are ‘positive-sum' or wealth-creating
transactions, those that occur because all parties to the transaction believe
they will be better off as a result."[13]
"Consumer
sovereignty." Mises
emphasized that people as producers operate in an "entrepreneurial"
role of anticipating what at least some portion of the consuming public will
want. If the businessman is successful
in this anticipation, profitable exchange ensues; if not, the entrepreneur
fails. Accordingly, it is ultimately the
consumers who determine what is offered: "Neither the entrepreneurs nor
the farmers nor the capitalists determine what has to be produced. The consumers do that." Producers "are bound to comply in their
operations with the orders of the buying public... With every penny spent the
consumers determine the direction of all production processes...."[14] The economist John Van Sickle made the same
point: "The consumer calls the tune.
He is the king, exacting and frequently capricious... In a market
economy every income receiver is a voter.
His dollars are his ballots."[15]
The Left likes to emphasize how consumers are subject to
manipulation by advertising, packaging, etc.
It is true that there are all sorts of determinants of what consumers
want. But in keeping with his view of
human nature generally, the classical liberal credits the public with being
primarily composed of people who are competent and self-determining. He considers the fact that they are
influenced irrelevant to the point about their sovereignty.
"The optimum
allocation of resources."
The point about consumer sovereignty is a description of how the market
works. It leads to the further
observation that serving the consumers in the marketplace creates the "optimum"
allocation of resources (and, as part of it, the most appropriate assignment of
economic and social position to those who succeed or fail). This was expressed by Mises when he said that
"the social function of catallactic [market] competition... is to
safeguard the best satisfaction of the consumers which they can attain under
the given state of the economic data" and when he added that "to
assign to everybody his proper place in society is the task of the
consumers."[16] The same point was made a century ago by
Henry George: "On the whole, the ability of any industry to establish and
sustain itself in a free field is the measure of its public utility, and that
‘struggle for existence' which drives out unprofitable industries is the best
means of determining what industries are needed under existing conditions and
what are not."[17]
It is sometimes argued that this is a point that has a
purely technical meaning in economics, and that "optimum" has nothing
necessarily to do with "good" or "best" as a value
judgment. But that isn't the way the concept
is used in the system of thought I am describing. There, the value judgment definitely does
come in, just as we saw it did in the quotes just given from Mises and
George. In the book from which I have
been quoting published in 1996 by the Foundation for Economic Education, John
K. Williams argues that "profits simply show that people want" [a
certain thing]... "Limited resources are being allocated in a
people-serving, responsible way."[18] In the same book, Garet Garrett includes a
quote from Adam Smith's The Wealth of Nations (1776): "Each
individual... generally... neither intends to promote the public interest or
knows how much he is promoting it... [H]e intends only his own gain, and he is
in this, as in many other cases, led by an invisible hand to promote an end
which was not part of his intention... By pursuing his own interest he
frequently promotes that of society...."[19]
Exception is taken to this view when William Allen has one
of his mice say that "the theory of trade tells us much about why
and how trade takes place; it does not pass final judgment on the
ultimate desirability of trade" [his emphasis].[20] Some classical liberals will acknowledge that
objects of trade can be illegitimate, and would agree, for example, with
Richard Cobden of the early-nineteenth century Manchester School of Economics that
a landlord shouldn't knowingly rent space for use as a house of prostitution. (Cobden’s
point goes far beyond the relatively narrow issue of prostitution; it implies
that market transactions should be subject to moral considerations. This is a major qualifier.)
Others see it as consistent with their voluntaristic
principles, however, to say that it is none of the landlord's concern. It is enough for our present purposes to see
that, when speaking on a "macro" scale, the advocates of the
closed-system don't hesitate to affirm that the market makes the best
allocation of resources. The next
chapter will point to the logical fallacy in this, but that is not our present
concern.
What needs to be noticed now is that even though Mises and
most economists argue that economics as a descriptive science has nothing to
say about value judgments, so that science is one thing and preferences are
something totally separate, the "optimum allocation of resources"
concept does in fact introduce a massive value judgment in the course of
describing how the market works. This is
no small matter. It provides the basis
for the often-heard argument that any deviation from unhampered free exchange,
such as from "free trade" in international affairs, will
"distort" the allocation of resources, introducing an
"inefficiency" that produces a sub-optimum satisfaction of
wants. That it might do so is treated as
a definitive argument against the action.
Nothing could better serve a theory of pure laissez-faire. It is
the linchpin of the closed system,
since it provides a powerfully persuasive, virtually conclusive argument
against anything that would alter or deviate from unhampered exchange.
Emphasis on
consumers. Out of Mises's
stress on "consumer sovereignty," we can see why the supporters of
the current free trade, global economy school (in common with other "free
trade" proponents historically) put their emphasis totally on consumer
well-being, without any comparable preoccupation with the well-being of the
same people in their role as producers and earners. Recall George's point about the desirability
of a "struggle for existence" among producers. To this we can add Joseph Schumpeter's famous
praise for the "creative destruction" that in effect welcomes burnt-out
hulks all over the marketplace as those who don't satisfy the consumers fail.
The assumption underlying this seemingly one-sided
preoccupation is that the system as a whole works quite well. Failures on the producer side can be
tolerated, even welcomed, in such a dynamic setting. Each failure is a passing phenomenon that
doesn't go to the heart of the matter.
There is no reason to worry about people as they wear their producer
hats, since that will take care of itself within the competitive
framework. A value judgment that
mobility of location and of economic and social station is an accepted part of
the system is certainly a part of it (in contrast to the traditionalist
"conservative’s" love of long-lasting community ties and family
attachments), as well as the expectation that the economy, with the vast
majority of people in it, will thrive even though some fail temporarily.
As mentioned in the preceding chapter, this emphasis on the
consumer co-exists within classical liberal thinking with a rejection of the
notion that there is a ready-at-hand “pie” to be divided, such as is
presupposed by an outlook that looks mainly to “distribution.” Clearly, the production side of the economy
is important and not to be taken for granted, even though that production is
left to arise out of a fierce competitive struggle.
The role of
supply-and-demand. As the theory
sees it, there is no such thing as unemployment in an “unhampered market
economy” other than the "frictional unemployment" that occurs
temporarily as someone moves from place to place or job to job. "Supply and demand" adjusts
everything on an on-going basis. If, for
example, there are a lot of people wanting to work but only a few jobs, the
price of labor will be bid down to a level at which entrepreneurs find it profitable to employ
everybody who then still wants to work (some will have responded to the fall in
wages by going elsewhere, either physically or market-wise by training for new
skills, or by dropping out of the labor market). In the absence of an out-of-kilter monetary
system, the economy develops no long-standing maladjustments.
The market has
very few, if any, imperfections.
The argument that raged early in the nineteenth century between
classical economists and critics of a market economy largely had to do with
whether the market had flaws that kept it from working. The occasion for David Ricardo’s formulating his "law of comparative
cost" was to counter the argument that some people (such as one country in
international trade) might be better at everything than someone else, and hence
would get all the business, leaving the others to starve. Jean Baptiste Say formulated "Say's
Law" (that each person’s production creates demand for what others
produce) to counter the anti-market criticism that if one person produces
something there may be no one to buy it.
In the twentieth century, classical liberals haven't been
sold on the idea of "bargaining power disparities" as meaningfully
vitiating the "act of exchange."
In this connection the commonsense of the American people, who do
believe in bargaining power disparities, has overridden what I have called the
"classical liberal underlay."
Most people do see that the parties to a transaction often aren't
equally prepared to protect their own interests.[21] This causes them to support a good many legal
protections that classical liberals usually consider uncalled-for
"interventions." (In the next
chapter, I will discuss the validity of the concept “bargaining power
disparities.”)
At the beginning of this chapter, I spoke of a difference
of opinion among classical liberals about whether there is any problem of
combinations or conspiracies-in-restraint-of-trade within a market economy. In the closed ideological system, however,
there is no dispute about it; its proponents are clearly on the side of the
view that there can be no such imperfections.
They believe that government favoritism is the source of any such
warpings of the market, since unrelenting competition would quickly wipe out
any anti-competitive effort by firms unless they are shielded from it. This becomes especially true in a global
marketplace with its limitless competition.
Wants are infinite, so there will never
be any limit to "scarcity" and the need to satisfy consumers. This thought picks up on a truism that was
stated by economic theory long ago and that has certainly been descriptive of
the world as we have known it.
Socialists and many environmentalists have argued that "people
don't really need all the things that are made available to them in a consumer
society," and that's a sentiment cultural conservatives are inclined to
share. Each may prefer a simplification
that would restore a leisured pace to life and a variety of less
gadget-oriented pleasures. Such a view
is bound to take on more significance as the new technology allows an
ever-higher affluence, and it may be forced by the displacement of people from
the market. But until now the
market-oriented philosophy has been able to point toward expanding wants, as
things that once were considered luxuries (or hadn't even been thought of) come
to be considered necessities. We can see
that there is vast room for upward expansion of desires in the context of
technology's new possibilities. And we
also know that much of the world is a sink of poverty and unmet needs. So the premise that wants are infinite remains
a good one as we go into the
future. (Whether, as is often assumed,
this will provide unending demand for billions of unskilled workers, or even
for billions of skilled ones, is much harder to affirm.)
These are the concepts
that, along with a number of associated ideas, make up the conceptual
system behind unwavering support for a “free market.” We can readily see how they form a closed
system, providing an answer to any objection.
I count many good friends among the holders of this body of ideas.
The conceptual system has some attributes that are poorly
suited to classical liberal philosophy and that are especially important today
because they may reinforce any unwillingness to adapt. Here are some:
Much of the closed-system's argumentation is put forward
adversarially, as a lawyer does who is "building a case." This lack of objectivity weakens its
intellectual quality. The writing tends
to be for an audience of true believers, who see doubts or introspections as
weakness. It follows that there is often
an unwillingness to give credit to other views.
(This is a common human failing, and one that the Left has also been
guilty of for many decades about ideas other than its own.)
It is no wonder, then, that intellectual shallowness
discolors the system of thought. In the
twentieth century, the thinkers behind almost every philosophy have finely-honed
each concept, exploring nuances that weren’t thought of in the nineteenth
century. But this hasn't been true of
the market philosophy, which has stayed almost exactly where it was a century
ago. Little new thinking is given to any
of its concepts, and very little to the legal, institutional, cultural and
moral prerequisites of a market society. Those are taken as givens that don't need further
thought.
The vastly increased role of the federal government in the
This inability prevents concern about values that the
system doesn't accommodate. Thus, the system lends itself to the
world-cosmopolitan outlook that cares nothing for national or cultural values.
It is the perfect philosophy for the multinational businessman's denigration of
national loyalty, and will remain so as long as it continues as a closed
system.
Part of the shallowness comes from a confusion of theoretical
economic models with reality. Recall the example above about how
supply-and-demand is expected to lead to adjustments that will clear the market
of everything that is offered for sale.
"If there is a large supply of workers, wages will fall until it becomes
profitable for entrepreneurs to hire the full supply." No doubt that is exactly the way the theory’s
models say things will work; and it is fine as model-building, which is a way
of conceptualizing. But the model
doesn't seek directly to replicate reality.
To understand what happens in fact, it is necessary to ask "how
long will it take for entrepreneurs to see the profit opportunity and to
respond to it? How long to raise the
capital, to establish the organizations?
How low will wages go, and with what effects on the society?" Economic theory doesn't speak to these
questions; it only predicts a "tendency" for some entrepreneurs to
spot profit opportunities and move toward them. One would never know this from
the sugar-coated descriptions in the free-trade literature.
The same shallowness is seen in the expectation of human
rationality. The theory realizes that
rationality and perfect knowledge are hypotheticals, inserted so that it
becomes possible to deduce the behavior that will follow if they are
present. (The Left is mistaken when it
attacks the theory's use of such constructs as part of its criticism of the
theory. It is like criticizing a
mathematician for using the concept of a perfectly straight line.) But often these theoretical constructs are
used as though they describe reality, which they don't. A good example is the recent enthusiasm in
libertarian literature for "free banking," in which totally
unregulated banking is projected to be disciplined by the ever-watchful eye of
the marketplace. Friedrich Hayek's
ideologically purist side is perhaps best revealed by his work in this
area.
But how is it possible to think that "the market"
is capable of exercising a splendid attentiveness when we see all around us
situations in which economic actors, even in the most competitive situations,
are acting half-blind (and continue to do so over many years)? An example would be having a home built in a
large city where there are many contractors.
In the
This provides a
warning. The market ideology in its currently popular form is the one that
will most resist the changes needed to meet displacement and polarization. Failure
to adapt will be a tragedy, not the least for those who are devoted to “a free
society.” Those who are inclined to make
the necessary adaptation will welcome the next chapter, where we will critique
the concepts mentioned here.
ENDNOTES
1. Lord Robbins, Politics and Economics: Papers in Political Economy (New York: St. Martins
Press, Inc., 1963), p. 43.
[2]. Patrick
J. Buchanan, The Great Betrayal (Boston: Little, Brown and Company,
1998), pp. 16, 61.
[3]. See, as
an excellent example, Lawrence Auster, The Path to National Suicide: An
Essay on Immigration and Multiculturalism (Monterey, VA: The American
Immigration Control Foundation, 1990).
[4]. Milton
Friedman, Capitalism and Freedom (Chicago: Phoenix Books, 1962), p.
31. It is worth mentioning that whether
the
[5]. See page
xii of his What It Means to be a Libertarian (New York: Broadway Books,
1997), where he says that "many of the leading thinkers of the libertarian
movement... present a logic of individual liberty that is purer and more
uncompromising than the one you will find here."
[6]. Max
Weber, The Methodology of the Social Sciences (Glencoe: The Free Press,
1949), p. 16.
[7]. Robbins,
Politics and Economics, p. 100.
[8]. Peter J.
Hill, "Markets and Morality," in Mark W. Hendrickson, ed., The
Morality of Capitalism (Irvington-on-Hudson, NY: Foundation for Economic
Education, Inc., 1996), p. 100.
[9]. Ludwig
von Mises, Human Action (New Haven: Yale University Press, 1949), p.
679.
[10]. See especially Henry George, Protection or
Free Trade (New York: Robert Schalkenbach Foundation, 1966), p. 312.
[11]. William
R. Allen, The
[12]. Richard M. Ebeling and Jacob G. Hornberger,
ed.s., The Case for Free Trade and Open Immigration (Fairfax, VA: The Future of Freedom Foundation, 1995), p. 3.
[13]. Hill, in
Hendrickson, Morality of Capitalism, p. 99.
[14]. Mises, Human
Action, p. 270.
[15]. John V. Van Sickle, Freedom in Jeopardy
(New York: World Publishing Company, 1969), p. 55.
[16]. Mises, Human
Action, pp. 276, 275.
[17]. George, Protection
or Free Trade, p. 96.
[18]. John K.
Williams, "The Armor of Saul," in Hendrickson, The Morality of
Capitalism, p. 34.
[19]. Quoted
by Garrett in Hendrickson, The Morality of Capitalism, p. 71.
[20]. Allen,
[21]. See my discussion of bargaining power
disparities, critiquing it from a classical liberal point of view, in my Socialist
Thought (Washington: University Press of America, 1983), pp. 169-194; also
available on www.dwightmurphey-collectedwritings.info