Vincent Carroll of the Denver Post heard Obama speak of people who believe in completely unfettered markets, and went seeking such people. He couldn’t find them in any of the usual places, but he finally found one at the Mises Institute. You really must read Doug French’s comment. Don’t want to spoil it.
Source link: http://blog.mises.org/10661/seeking-a-believer-in-laissez-faire/
Seeking a believer in laissez-faire
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People usually stammer and cast their gaze downward when I mention my anarchist views of markets. They just don’t know what to think and cannot fathom life without restraint. One person, however, is pretty intellectually honest about the fact that he is too invested in the “system” and doesn’t want to risk what he has attained. As demonstrated in the article, both the Republicans and the Democrats are heavily invested in the current system and will not seek radical change.
It looks like Doug French’s comment may have been “moderated”. At least I couldn’t see it.
lolmoderation. was he sweary, or merely outspoken?
His comment was in the actual article. Read it.
-Victor
I was curious where French stood. Since I had not heard otherwise, I assumed he was a classical liberal in the Ron Paul sense, favoring a return to the constitution or maybe even a reformed articles of confederation. His answer made me chuckle because the author thought he was joking.
“absolutist” never had such a nice ring to it.
Something that makes looking through and listening to your audio files easy.
Republicans, Dems, and Libertarians included are all politically motivated groups. Even if they believed in complete laissez-faire, it is unlikely a prominent figure representing the party would voice this opinion. Any Austrian wishing to run for office must convert (if only in appearance) to at least some view of regulation. However, one free from the maintenance of a political image is able to voice his true beliefs. Whether laissez-faire is optimal or not, it stands no chance in politics and is doomed to be presented as unrealistic Utopian gibberish by the reform minded, self-interested politicians who hold the power.
The reality is that unfettered markets would lead to more regulation, but proprietary regulation.
If private insurers offered deposit insurance they would charge premiums tied to the risks the insured bank took, and you can be sure they would be checking on a regular basis.
Capital markets might be essentially closed to participation by individuals who did not clear a rather high bar, being limited to investing indirectly through a fund. I believe Lloyds of London’s Names were people who could sustain huge losses with impunity until the 1980s.
Proprietary regulation is the unfettered market’s reaction to problems that occur and would be far more effective than the political, non-proprietary kind.
Mr. Gladish, what you say is incorrect.
It is true that firms would do what they could to minimize risk, but why would that be a bad thing? Is there a problem with people and firms to create system to protect themselves from problems, especially if what is involved are voluntary contracts? Personally, I think it would be beneficial.
Your post implies that capital markets would shrink under a free system. Markets would do the exact opposite. They would expand, but not at some arbitrary and unsustainable government mandated rate. If fractional reserves were to be practiced under this hypothetical free system (meaning free banking, no stock market regulations at all and simplified flat tax or better yet no tax system,) booms and busts would be much smaller, easier to contain and easier to single out the fools that caused them in the first place. Anybody that was overextended would be subject to attack from all sides. See George Selgin’s historical work on Scottish Free Banking for a good overview of how this would work.
Re: Private insurers. I seriously doubt there would be a wide scale private insurance for bank deposits. What would exist would be more bank capital, which was originally the buffer against any foreseeable problems, but was regulated away over the years via lowering reserve requirements. Again, see George Selgin’s work on Scottish Free Banking.
Remember, it was monetary and credit pumping by the Fed as well as arbitrary SEC regulation, Basel value at risk accounting rules, government sanctioned credit rating agencies and government subsidized home ownership that created the current crisis, not the market process.
Mr. Cortez,
I didn’t say minimizing risk would be a bad thing. Perhaps when I used the word regulation modified by proprietary it confused you. Proprietary regulation is exemplified by something like Zagat where restaurants proudly display their inclusion in that companies ratings. Another example is eBay’s feedback ratings. I assume you don’t find these examples offensive.
I didn’t mean to imply that capital markets would either expand or contract. I only said that direct access to capital markets would probably be limited since “protecting the little guy,” as the state claims to do, produces a lot of expense without much benefit. Investing through a trusted fund manager might be the only way the general public would invest.
With respect to private insurers, you are free to doubt all you like. I think that Scottish banking is not the end of the discussion as to what business models might prosper or fail – it is actually more like the beginning. The idea is that there is an array of business models that might work and do not involve state interference. What is clear is that the FDIC does not behave as a private insurer and produces boatloads of moral hazard.
I guess that you were looking for someone to teach or argue with, but I don’t think I’m your man.
The problem with capitalism is that it has never been tried before.
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