When I became seriously interested in the free market I began, also, to encounter a good deal of criticism of that system, mainly because the critics mindlessly blamed the Great Depression on it. But looking at it more carefully I learned that by the time of the Great Depression there was nearly nothing left of laissez-faire capitalism in America.
Sure, compared to some other countries there was more capitalism here than elsewhere, but compared to a dead drunk someone who only staggers around a bit from booze seems nearly sober.
Sadly, America was never “sober,” never a completely free-market economy, and after the populist political economic influences of the early 1900s only the momentum of the remnants of a free economy was in evidence.
Contrary to widespread myth, FDR did not rescue the country from the government-induced Great Depression – it was the second World War that exerted the greatest remedial influence.
One thing critics of capitalism kept repeating since the New Deal is that nothing like the Great Depression and the economic mess surrounding it can happen now since government stepped in with all its regulations and safety measures.
When our current economic slide began to be undeniable, defenders of the welfare state, of extensive government intervention in the marketplace, started to blame it on market fundamentalism, on the “ridiculous confidence” shown in the free-market system.
Of course, this was a ruse and continues to be, as put out by the politicians who keep this way adding fuel to the fire they set in the first place. They keep repeating the lie that deregulation caused the current fiasco when, in fact, the main culprit is the easy credit policy demanded of banks and other lending institutions so as to “level the playing field” for everyone.
Instead of enabling minorities and groups whose members had experienced injustices and economic setbacks in the past, by means of freeing up the economy as fully as possible, the political class tended, in the main, to embrace the idea that handouts, special breaks and privileges, including easy credit, would be the proper way to “help.”
It never is, of course, but it can postpone the chicken coming home to roost. For a while by stealing from Peter so as to support Paul, it can appear to be effective but, in time, Peter will not take it anymore.
These elementary lessons of the vitality of freedom – in this case vis-à-vis economic health – keep being rejected and even outright distorted by statists around America and the world. Because it isn’t simple to trace out the chain of causation when disaster finally hits, many people keep repeating and get some mileage out of their anti-market message.
What is really sad is that nearly all those who have been most instrumental in precipitating the current economic fiasco are walking around telling lies with virtual total immunity.
The chorus of those who understand how ineffectual the government measures are and how much they make things worse is too small and hardly gains a hearing in the mainstream forums where the problems are being talked about.
I know what I must do in the light of all this. I must continue to try to educate folks to the superior value of human liberty and how it is the only hope for bringing about recovery. Maybe you can help me.
Tibor Machan holds the R.C. Hoiles Chair in Business Ethics and Free Enterprise at Chapman University and is a research fellow at the Pacific Research Institute and Hoover Institution (Stanford). He advises Freedom Communications, parent company of this newspaper. E-mail him at [email protected].
Posted by Ricardo Valenzuela at 10:24 AM