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All hail the market

A person I am acquainted with through Facebook posted some days back that it’s time to abandon Keynesianism and return to the free market.

I find this a remarkable statement of faith—speaking as someone who watched the free market efficiently erase a third of his retirement savings a couple of years back.

Though I am not an economist, I know a little history, and anyone else who knows any will remember that recurring boom-and-bust cycles that have marked the free market in the United States for the past two centuries. The nineteenth century was predisposed to what were called “panics,” financial collapses that ushered in recessions and depressions. The Panic of 1837, which killed Martin Van Buren’s hopes of re-election to the presidency. The Panic of 1873, the Panic of 1893, and others leading up to the Big One in 1929.

Problems with the money supply were associated with such panics, as your recollection of those unenlightening debates over bimetallism will remind you. And panics were also marked by speculative excesses—bubbles. The consequences, when reckless speculators got their comeuppance from the Invisible Hand, also included the collateral damage of unemployment and bankruptcy for tens of thousands of ordinary people who had little or no role in the money supply or the stock market.

Those who romanticize the free market gloss over its destabilizing tendencies. And those who attempt to intervene to moderate that destabilization—the creators of the Federal Reserve System in Woodrow Wilson’s administration or the banking and securities reformers and creators of Social Security in Franklin Roosevelt’s administration—are labeled radicals, Bolsheviks, socialists, etc., etc. You can depend on it that today, as for the past century and more, any effort to establish governmental regulation in any area will be denounced as socialism, a word that has pretty much lost any tangible meaning in our political discourse.

I’m an American citizen resident in a capitalist mixed economy, and, thank you, I have no wish to go elsewhere. What I do wish, vainly, is that our public discourse could come to rely a little less on shouted slogans and a little more on examination of facts.

That said, I admit to a certain mordant pleasure at the knowledge that the circus is perpetually in town.



Posted by John McIntyre at 2:02 PM | | Comments (5)


An addendum on the meaninglessness of public discourse: The other day a letter to the editor of The Baltimore Sun described Barack Obama, the president who continued George Bush's policies of salvaging major banks and corporations from ruin, and whose health care plan preserves private, profit-making insurance companies, as a "Marxist."

If Obama is a Marxist, then someone should hightail it to Highgate Cemetery in London, where a particular plot of earth is undoubtedly trembling:

The thing that always strikes me about the calls for little or no government interference with the market is how these calls are made from within a society that has benefited so greatly (and still does) from government interference with the market, whether it be environmental controls, aid to small business, educational assistance, infrastructure, etc. Do people who live in chaotic and unregulated societies long for less government assistance in their lives?

I, for one, would like to see Graham-Leach-Bliley repealed.

I have greatly benefited from Cosma Shalizi's rational and clear analysis of why you need a powerful interventionist state to keep capitalism going.

I'm constantly bewildered by the fact that people argue in favor of unregulated free markets when it was an unregulated (or at least underregulated) free market that got us into this mess.

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About John McIntyre
John McIntyre, mild-mannered editor for a great metropolitan newspaper, has fussed over writers’ work, to sporadic expressions of gratitude, for thirty years. He is The Sun’s night content production manager and former head of its copy desk. He also teaches editing at Loyola University Maryland. A former president of the American Copy Editors Society, a native of Kentucky, a graduate of Michigan State and Syracuse, and a moderate prescriptivist, he writes about language, journalism, and arbitrarily chosen topics. If you are inspired by a spirit of contradiction, comment on the posts or write to him at
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