Column on Blaming Freedom Again

Blaming Freedom Again
Tibor R. Machan
It happened, of course, with the Great Depression. Instead of seeing it as
a result of government intervention and mismanagement, that calamity was
supposed to have occurred because of the free market. Free adult men and
women in America and in time elsewhere supposedly produced a colossal
downturn in various economies–massive unemployment, bank failures, fall
in productivity, you name it. All the fault of freedom, none that of
government meddling.
We are back to this once again. Peter S. Goodman wrote, on Sunday, April
13, in that great journal of economic history, The New York Times, that
our current “downward spiral of the economy is challenging a notion that
has underpinned American economic policy for a quarter-century–the idea
that prosperity springs from markets left free of government
interference.” So it is freedom, people working for other people who want
them to work for them, earning incomes they can then use to buy goods and
services as they judge fit, that’s responsible for the downward spiral.
This is then what makes Hillary Rodham Clinton’s call for an economic
tsar–“a commander-in-chief of the economy”–so attractive and even
necessary. Yes, it is freedom that must be stopped, at all cost, and in
its place what is needed is more government, with all of those wise and
virtuous politicians and bureaucrats who of course know so much better and
will force–or as two academics at the University of Chicago would have
it, "nudge"–us all to do better.
But it is all a ruse. Sadly, however, neither Democrats and Republicans
will straighten out this story.
Democrats love government meddling–they tend all to believe that once
they 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 John
Maynard Keynes, is the command economy. (Keynes himself said, in his
preface to the German edition of his famous book The General Theory of
Employment, Interest and Money [1936], that the Third Reich was best
positioned to put his ideas into play!)
Republicans like top-down economic management no less than Democrats, only
they tend to favor business more than their political opponents, but not
with policies of freedom but protectionism, subsidies, bailouts, and other
approaches that are anything but what the late Milton Friedman–the
ostensible subject of Mr. Goodman’s essay–and other libertarian political
economists advocated. So do not hold your breath waiting for a letter to
The 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 of
the Democrats, the victim in all this is human liberty! The myth that we
have had a free market system in place over the last 25 years is being
spread indefatigably by the likes of Goodman and, especially, Paul Krugman
who promotes it in his regular column for The Times.
As Allan H. Meltzer, the free market economist at Carnegie Mellon
University (quoted in Mr. Goodman’s piece) put the point, “Now we’ve come
into a crisis that has dampened enthusiasm for those [free market]
policies, and we’re headed back into a period of more regulations that
will do the same bad things as in the past.” The only mistake in this
remarks is its implicit acceptance of the idea that Professor Friedman’s
free market philosophy did in fact guide the American government’s
economic policy for the last quarter century. Greenberg claims, for
example, that when “Ronald Reagan entered the White House” he commenced
“elevating Mr. Friedman’s laissez-faire ideals into a veritable set of
commandments.” Not so. Reagan didn’t really implement too many free market
policies and he barely managed to cut back some government economic
regulations. Moreover, with the massive borrowing he perpetrated in order
to help end the Cold War, Reagan didn’t achieve turning American economic
policy toward freedom. (Of course, he was working with a Democratic
Congress much of his time in office, so he alone cannot be blamed for
that.)
But none of this will be pointed out in The Times since that newspaper is
eagerly supporting returning to Keynesian economic top-down management,
never mind that this ideas has been discredited far more than have
Friedman’s free market views. The faith of the editors of The Times and
Mr. Goodman in handing people’s economic lives over to a bunch of
politicians and bureaucrats is blind. And it seems to induce them toward
rewriting economic history as well.

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