Wednesday, March 15, 2006


Our Free Market Religion

From the Gospel according to Julian Sanchez.

A classic essay on the religious-like adherence to a laissez-faire ideology.
(Newmark's Door)

This essay seems to be cribbing quite a few ideas from the Cafe Hayek blog.
Particuarly this post

Or maybe it's the other way around? I don't know.

Either way, I don't think being in favor of market intervention is the same as being against the free market system as Julian seems to claim. Even trying to seperate "interventionists" (in Julian's view, people that try to 'correct' market outcomes) from free-market supporters (people that dont?) can be very difficult.

Aside from the most anarcho of capitalists, many people that believe in the free market system believe that the government should provide national defense and criminal justice services. Why? Because externalities combined with high transaction costs (among other things) lead markets to fail to provide as much of these services as these people would like.

Is this really what we mean by market intervention? If so, does that make Ayn Rand or Miltion Friedman anti-market interventionists? According to Julian it does.

But If this isn't how we define "intervention", then how do we define it?

Julian's article could have been much more thought out, imo.

left out hinge sentence and I can't edit.

The point was that if being interventionists means "correcting" market failures (as Julian defines), then market advocates like Milton Friedman are interventionists.
Sorry Dee, I didn't see that in my reading. I only thought it was interesting how people see things:

How "faith" in the free market becomes the relgion of laissez faire ideology.

And how those that proclaim it as simply a false religion are generally those who put their faith in an omnipotent government to make all things right.

I am not sure if seeing any uses of intervention makes you a non-believer and I am not sure if that is what Sanchez is going for.
But I find Julian's dichotomy artifical and strained. For the reasons I discussed earlier, it is impossible to tell--except in the most extreme cases--which of the two "faiths" any one person falls into. At least using Julian's definitions.

Julian realizes this near the end of the article when he can't easily fit Kuttner and Stiglitz into being members of the anti-market faith. Amazingly, he goes ahead and does it anyway.

I think the Cafe Hayek post is a lot better on both exposition and application.

Though I can't say I like either of them. Neither essay is objectivley trying to categorize the spectrum of dominant political beliefs. It's pretty clear which side Julian wants to be on. And all I'm hearing is "your side has blind faith in X" "NO YOUR SIDE DOES!".
It seems to me like Julian is simply observing a tendency in leftist-socialists to categorize capitalists as religiously tied to free markets. Other than his short mention of Hayek's doctrine on intervention I don't see evidence that he believes this himself.

Well, I think Julians essay obviously goes well beyond that. In fact, more than half the essay is devoted to saying that it is the market bashers (I would hardly call Kuttner or Stiglitz socialists) that resemble fundamentalists.

To your point of whether there is evidence Julian believes, like Hayek, that a certain "dogmatic" defense of markets can be useful, I don't know.

I will concede that he does not explicitly say "and, personally, I also believe...". But can we really take that as evidence or even lack of evidence of Julian's opinion in this essay? Do we really need declarative sentences to discern one's position? Should we really evaluate an opiniated essay like we do a legal document?

I certainly hope not.

But, hey, differnt strokes for different folks.
Milton Friedman, on the Commanding Heights video, recalls a moment von Mises walks out of the Mt. Pelerin (sp?) conference saying "You're all socialists!" to the likes of Hayek, etc.

Practicality trumps Ideology in every aspect of life. We are all hypocrites. I have demonstrated elsewhere how hypocritical I am in that I don't believe in government aid in any form, yet I benefited from government aid to the tune of nearly $20,000 this year when all is said and done.

What is lacking is a group of individuals that can agree upon a set of goals and values that can stand up to social pressure to conform to statism (paganism).

Free-marketers get the closest of anyone to logical consistency in their approach, yet many of them have failed to face the fact that for such a system to work purely there must be a common ethic among all the individuals in such a market. So we are left staring at shadows on the wall of a cave rather than insisting upon our ideals. We are forced to compromise.

Where a danger lies is in teaching the compromise rather than the ideal to the next generation until the two are confused and eventually the ideal is lost.

I am not sure if benefiting for governmental funds or infrastructure, makes anyone a hypocrite. The fact that individuals will always try to pursue outcomes that are best for them is not necessarily hypocritical.

Many of the free-marketeers would say that there should be no favors to give in the first place, not that it is wrong for us to accept those favors. (enlightened self-interest)

If any of us would like to drive a car, pick up the phone, use the internet, go to school, or even under the simplest of attempts to live without coercion, we run into governmental infrastructure, monopoly, and/or funds. Governmental forces and activities surround all of our daily activities.

The only folks that I know that would not be, by your definition, hypocritical are the anarcho-primitivist folks. They pursue the goal of returning to the wild, dissolving of the government and all coercive activities. Additionally, to “remain true” they would also not be able to use any of the infrastructure that the government had established or the common law.

So in recognizing this "practicality", anyone who does not love the life-giving creature (through which all good things flow) we call government, is an outright hypocrite.
But are all libertarian-statists being hypocritical? I wonder.

Objectivist libertarians certainly thought their support of government institutions flow naturally from Ayn Rand's premices (I would disagree, but that's me).

Consequentialist libertarians could also reasonably believe in government intervention without abandoning other ideals or principals.

I really have a tough time believeing that all libertarians are anachro-capitalists at heart.
All libertarians are not anarcho-capitalists. Libertarians can agree to a certain level of government. Anarcho-capitalists, by definition would desire no government and only markets for public services. The differing branches of anarchy differ on what constitutes coercion (hierachy or government) however.
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