It's All Freedom's Fault!!!!

Column on Blaming Freedom Again
Tibor R. Machan

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It happened, of course, with the Great Depression. Instead of seeing it asa result of government intervention and mismanagement, that calamity wassupposed to have occurred because of the free market. Free adult men andwomen in America and in time elsewhere supposedly produced a colossaldownturn in various economies--massive unemployment, bank failures, fallin productivity, you name it. All the fault of freedom, none that ofgovernment meddling.We are back to this once again. Peter S. Goodman wrote, on Sunday, April13, in that great journal of economic history, The New York Times, thatour current “downward spiral of the economy is challenging a notion thathas underpinned American economic policy for a quarter-century--the ideathat prosperity springs from markets left free of governmentinterference.” So it is freedom, people working for other people who wantthem to work for them, earning incomes they can then use to buy goods andservices as they judge fit, that’s responsible for the downward spiral.This is then what makes Hillary Rodham Clinton’s call for an economictsar--“a commander-in-chief of the economy”--so attractive and evennecessary. Yes, it is freedom that must be stopped, at all cost, and inits place what is needed is more government, with all of those wise andvirtuous politicians and bureaucrats who of course know so much better andwill force--or as two academics at the University of Chicago would haveit, "nudge"--us all to do better. But it is all a ruse. Sadly, however, neither Democrats and Republicanswill straighten out this story. Democrats love government meddling--they tend all to believe that oncethey are in power, they will whip us into shape in no time. Their ideal,going back to the economic philosophy of the New Deal and its hero JohnMaynard Keynes, is the command economy. (Keynes himself said, in hispreface to the German edition of his famous book The General Theory ofEmployment, Interest and Money [1936], that the Third Reich was bestpositioned to put his ideas into play!)Republicans like top-down economic management no less than Democrats, onlythey tend to favor business more than their political opponents, but notwith policies of freedom but protectionism, subsidies, bailouts, and otherapproaches that are anything but what the late Milton Friedman--theostensible subject of Mr. Goodman’s essay--and other libertarian politicaleconomists advocated. So do not hold your breath waiting for a letter toThe Times from John McCain denouncing the smear of the free market by Mr.Goodman! With the silence of the Republicans and the distortions in the attacks ofthe Democrats, the victim in all this is human liberty! The myth that wehave had a free market system in place over the last 25 years is beingspread indefatigably by the likes of Goodman and, especially, Paul Krugmanwho promotes it in his regular column for The Times. As Allan H. Meltzer, the free market economist at Carnegie MellonUniversity (quoted in Mr. Goodman’s piece) put the point, “Now we’ve comeinto a crisis that has dampened enthusiasm for those [free market]policies, and we’re headed back into a period of more regulations thatwill do the same bad things as in the past.” The only mistake in thisremarks is its implicit acceptance of the idea that Professor Friedman’sfree market philosophy did in fact guide the American government’seconomic policy for the last quarter century. Greenberg claims, forexample, that when “Ronald Reagan entered the White House” he commenced“elevating Mr. Friedman’s laissez-faire ideals into a veritable set ofcommandments.” Not so. Reagan didn’t really implement too many free marketpolicies and he barely managed to cut back some government economicregulations. Moreover, with the massive borrowing he perpetrated in orderto help end the Cold War, Reagan didn’t achieve turning American economicpolicy toward freedom. (Of course, he was working with a DemocraticCongress much of his time in office, so he alone cannot be blamed forthat.)But none of this will be pointed out in The Times since that newspaper iseagerly supporting returning to Keynesian economic top-down management,never mind that this ideas has been discredited far more than haveFriedman’s free market views. The faith of the editors of The Times andMr. Goodman in handing people’s economic lives over to a bunch ofpoliticians and bureaucrats is blind. And it seems to induce them towardrewriting economic history as well.