Wednesday 10 October 2007

A statist writes

This is behind the Scotsman's subscription wall so I'll limit myself to this quote:
Those in financial markets who believe in free markets have temporarily abandoned their faith. For the greater good of all (of course, it is never for their own selfish interests), they argued a bail-out was necessary.
Thus writes the hugely overrated Joseph Stiglitz who is a Nobel laureate in economics.

I've never known anyone who has a "faith" in free markets. All real free marketeers justify the market firstly on moral grounds - namely that it's wrong to initiate force or fraud on others - and secondly on a proper understanding of economic principles that leads inexorably to their supporting laissez faire.

Next, I haven't heard any free marketers calling for a banking bailout, especially as the main long-run beneficiaries would probably be politicians.

Finally, the whole banking crisis is caused by the opposite of free markets. It's the inevitable result of a system that allows governments (and their client banks) to create money out of thin air thereby devaluing the savings of honest citizens.

1 comment:

David Farrer said...

Comments made on previous template:

James Higham
...the main long-run beneficiaries would probably be politicians... 
The central financiers, David, to whom the pollies are in thrall.

14 October 2007, 13:14:28 GMT+01:00
– Like – Reply

Joshua Holmes
This isn't an attack on free market thinking, it's an attack on its supposed adherents in finance. They're all for free markets until they turn sour, in which case, bring on the state's teat! 
It's quite true that the banking and finance sectors have little to do with free markets, but that doesn't stop many of their participants from acting as though it is. This writer is smiling as they're exposed for the hypocrits they are. Frankly, I enjoy it myself, although I hate to see them get the bail-out they crave.

13 October 2007, 22:29:41 GMT+01:00
– Like – Reply

Neil Craig
"All real free marketeers justify the market firstly on moral grounds" 
This sounds a bit like an idealogical purity test. I think a lot of people under the impression they are believers in free markets do so on the utilitarian grounds that they are the most efficient way of running an economy, perhaps with a side order that a state which totally controls the economy is in a position to dictate on other matters.  
I don't adhere to the rights of capital thesis, more importantly I don't think Adam Smith did either.

13 October 2007, 15:24:56 GMT+01:00
– Like – Reply

It's like blaming the Great Depression on "capitalism" when you could better blame The Fed, Hoover and FDR.

11 October 2007, 12:10:34 GMT+01:00