I’ve noticed many of the big names in the “rational” community, such as Penn Jilette and Michael Shermer, are all about the free market and deregulation.
In fact Shermer seems to equate socialists and other critics of capitalism to the economic equivalent of Flat Earthers and creationists. Do you think this is unfair and too harsh?
Are there still rational reasons to oppose neoliberalism in the post Cold War era, or are modern socialists simply starry eyed progress-hating denialists who are irrationally biased by their dislike of consumerism?
OK, now how many big names have you noticed in the economics community? I’ll cheerfully recognize Penn Jilette as an authority on showmanship, magic, illusions, and trickery, but why should I pay any attention to what he has to say on economics?
For all their ‘rational’, I think they’re being a bit irrational. Plus I don’t tend to take people in show business as being experts on anything outside their field. They have a soap box, people listen to them, so suddenly their opinion on other things means what now?
Free Market capitalists usually ignore (or are willfully ignorant) the fact that the playing field is not level across all fields and markets. They engage in the same sort of magical thinking that all other '-ism’s engage in. The market corrects every problem, everything will work out in the end, the market always does what is best. All hogwash.
Deregulationists are the same, only less honest. “Self-regulating” my ass.
So really, what do these Performers gain from making a show of their isms? An audience. Money. Attention.
Why should I care about what a magician and historian think about economics? It’s not like either one has particular expertise in the field.
I think libertarians like Shermer and Jillette function as “useful idiots” for corporatism. Their impractical ideology is good at providing pseudo-intellectual cover for the predations of the rich, but it’s far too utopian to ever work as a blueprint for running a real city or country. At least the socialists have a real-world track record. Randians only have pipe-dreams.
But then, I’m not an economist either, so what do I know?
I would consider the term ‘economic ideology’ an oxymoron although technically it’s not since it is a social rather than a pure science. Even so, modern economics is primarily an empirical endeavor. Go ahead and crank out your “manifesto” but don’t expect any peer reviewed journal to publish it unless you’ve got valid verifiable data to support it. Oh and the math that ties the two together.
Of course there are still biases. Some economists emphasize fiscal policy over monetary policy for example. But no one seriously questions the fact that a free market does the best job of efficiently allocating scarce resources.
The problem is that model has certain pre-conditions or it doesn’t work. It doesn’t work if the market isn’t free for example - meaning you don’t have sufficient number of sellers and buyers competing. It doesn’t work if it can be easily manipulated (e.g., bitcoins). And so on.
Deciding what degree of freedom is optimal and for whom is where it gets sticky and you have disagreements.
Regulated free markets are the consensus of economic thinking today.
Of course there are rational reasons to oppose laissez-faire economics. It’s lunacy. You might as well as if there are rational reasons to oppose Creationism.
The Free-Marketists rightly mock regulation of a free market which is ineffective. People who regulate the markets don’t always do it smartly, and any regulation needs a significant amount of scrutiny and critique as to whether it is a good and effective regulation.
The Free-Marketists are on more shaky ground when they criticize ‘meddling’ in the Market for a goal that isn’t driven by profit (and/or greed). It can be argued that some social goals are more important than keeping the market purely free, and thus, it is worth it for the market to be less free or efficient for a suitably strong reason.
The Free-Marketists are in delusion-land when they claim any regulation of the market is always bad. Regulation protects free marketers from themselves when they create boom and bust cycles, especially protection from total and complete economic collapse. Regulation makes economic transactions fair and transparent… the level playing-field oft mentioned. Regulation can minimize monopolies and spur better competition.
The situation is that these pure Free-Marketists, who would have been derided and ignored decades ago, have moved to the center of the political milieu and media and are given credence by so-called mainstream politicians and journalists and ‘journalists.’
But also keep in mind that there are very few true Libertarian Free-Marketers. There are many who sound like they are, but they often carve out specific exceptions when it suits them.
Not necessarily. We are free to drive where we wish, just not at 150 mph.
The other problem is that totally free markets assume all actors are rational and make decisions in their own best interests. This has been proven to be incorrect.
Of course it depends upon what is meant by “obsolete”. Given the OP cites a couple of media flacks that have no actual professional background in economics, but that get paid by kow-towing to a corporate line, anything other than free market ideology is clearly obsolete. You can’t get paid like they do by preaching market regulation or worse. Not that you probably ever could. As to what serious economists research and suggest, this is an entire different world. You don’t hear about it much, but don’t forget that there is a Nobel Prize in economics. Rather than worry about what a couple of paid entertainers spout, one could look at what the last few stars of the profession do and think. Ideology of any form is not typically on the map. Indeed the idea of ideology is itself largely obsolete. For a profession that aspires to some semblance of scientific rigour, this is important.
Obsolete means that something is of no further use, and has been superseded. Given that the majority of the planet - if not actually the entire planet - is not a pure free market economy, it might be vastly more accurate to ask if it is pure free market ideology that is obsolete. The nearest thing is probably international trade, where regulating things is difficult at best, but the difficulty in regulating is in attempts to remove artificial barriers, as most countries tend to follow self interest when they place tariffs and other controls. The WTO does tend to pursue a free market agenda within the limits it has. But that is trade, and doesn’t cover the international flow and control of money itself. Political and military influence can have large perturbing effects that a free market ideology simply has no answer to.
The problem with those asking for a lot of government involvement is the assumption that those in power make decisions in the best interests of others. This too has been proven to be incorrect.
Some sort of balance is (as usual) required, but it’s my sense that most economists are more uncomfortable tilting towards government involvement than they are with market adjustments. This is not true for everything of course. There are some things (like public goods and externalities) which are not necessarily amenable to markets, and require other solutions(which may involve created, like carbon trading).
The problem with the Randians/libertarians/free-marketers is their assumption that if every individual acts in their own self-interest somehow the public good of society spontaneously emerges. The tragedy of the commons is the counter-argument to that illusion.
ETA: Also, the tragedy of the commons can be modeled as a functioning market if externality costs are assigned, and many people think that this is the proper way to treat it.
I think the distinction here is the difference between markets as a model of economies as opposed to an ideology of a free market as a perfect solution to their management. Modelling the tragedy of the commons as a market is one thing, but it does not claim to show how a free market economy avoids the problem - rather it explains how a free market fails to avoid it.
I’m sure it does. And to the vast majority of people, a free market is the type of Capitalist system we live under, in which the market sets prices but the government regulates safety, fraud, secret deals, and other factors. There are limits even to this definition, since several kinds of pricing is prohibited, like dumping, gouging, price-fixing, undercutting, and monopolizing. Even so, free market is the de facto word choice for what we have.
If some want to try to change this meaning to “no governmental intrusion of any kind any time” they’re welcome. But the response will surely be as much mocking as they get for their current lunacy.
The idea that a completely unregulated market would be “free” or fair in any sense of the word is…well, probably deliberate falsehood spread by people who know better, although I suppose it could be lunacy or stupidity.
Moneymaking entities do not seek to allow competitors an even footing.
No, actually. Modeling the tragedy of the commons with an assigned cost for externalities does show how a market can be used to avoid the the tragedy of the commons. The concept of carbon trading is an example.