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Source link: http://archive.mises.org/9281/a-straw-man-defense-of-a-new-new-deal/

A Straw Man Defense of a New ‘New Deal’

January 22, 2009 by

Jamie Galbraith does not like “the logic of the so-called Austrian School of Economics” nor my 2001 book review of Thomas Fleming’s excellent The New Dealers’ War. Also, he incorrectly lumps Austrians with those who argue that World War II ended the Great Depression.

{ 16 comments }

Enjoy Every Sandwich January 22, 2009 at 1:12 pm

Given the current political realities, the “New New Deal” is going to be passed. So I guess we’ll all see firsthand if it works or not.

What will be interesting to me will be what happens if it fails. Anybody wanna quote me odds on the chances that the big government Keynesians will accept the responsibility? How about the odds that they will blame “free market failure”?

Tom Woods January 22, 2009 at 1:19 pm

Poor Galbraith — this is the same man who said only about a dozen of the country’s 15,000 professional economists saw the bust coming. Um, it’s a little more than that, buddy. The “logic of the so-called Austrian School of Economics” works pretty well after all.

Inquisitor January 22, 2009 at 2:24 pm

So is it Galbraith’s turn for a beatdown now? About time!

bob January 22, 2009 at 3:15 pm

“We had not previously forseen how much the free market had damaged our economy. Our God-like intuition is surely correct, and we are fixing the problem. We just may need more time than expected, although early signs are optimistic. Please be patient and remember, free market capitalism can’t be trusted. We should take better care to avoid it in the future.”

Matt C. January 22, 2009 at 3:32 pm

The Keynesians all want a New New Deal. Did anyone mention we can’t even afford the old New Deal?

Why did the New Deal not show better results? We didn’t spend enough, of course.

If the current New Deal fails, the Keynesians will never admit defeat, but only complain that their vision and action did not reach far enough. You can’t win with Keynesians and their followers because they really don’t give a damn about economics. They just hate free markets and business. They will come up with as many absurd rationales as they need to in order to convince the gullible to follow their lead toward utopian socialism.

Those damn Austrians are so obsessed with logical argument. Can you believe it? They actually think logic is still useful. Man, they are really behind the times. We advanced Keynesians have progressed to the realm where everything goes except what we don’t like.

All aboard the socialist gravy train! Next stop: the land of the equally poor.

C. Evans January 22, 2009 at 6:04 pm

You nutty Austrians are the problem with your praxeology and free market nonsense. You all actually try to figure out how the world really works. Don’t you realize that the State solves everything if only everyone would just obey? If our New New Deal does not initially work as intended, it is only because the people did not obey. It simply means we need more power to compel the people. If we point enough guns at enough people, utopia will arrive.

If we leave markets alone, people will engage in voluntary trade to better their own lives. They will become productive and they might even decide that the State is unnecessary. Clearly people do not know what’s best for themselves. The State is the best judge of their wellbeing. Only we Keynesians as The Economists of the State know what’s best for the people.

jonh c January 22, 2009 at 8:36 pm

C. Evans post is really scary.
whats so bad about freedom?

Matt R. January 22, 2009 at 10:18 pm

Jonh C.,

I think Evans was being sarcastic.

Adam Frost January 22, 2009 at 10:56 pm

What will be interesting to me will be what happens if it fails. Anybody wanna quote me odds on the chances that the big government Keynesians will accept the responsibility? How about the odds that they will blame “free market failure”?

Didn’t happen with the original new deal, and as much as I wish it would, it probably won’t happen with the ‘new new deal’.

Randall Goble January 23, 2009 at 1:52 am

A commentor on the article page concocted this little gem of logical absurdity:

“If I remember correctly, the reason that people pay for stuff at the supermarket is that someone will grab you and lock your ass in jail if you don’t. Without that use of force there is no way that the private sector could operate.”

So essentially, his point is that businesses protecting their products from plunder are using physical “force” to persuade people to purchase them. Astounding.

Randall Goble January 23, 2009 at 2:00 am

or commentEr if you’re into spelling…

scineram January 23, 2009 at 2:07 am

He is right. No market without private property.

techsmechs January 23, 2009 at 7:21 am

Galbraith writes: “Such historical revisionism has been made popular during the past 25 years by a cadre of ideologically motivated economists and historians keen to debunk the effectiveness of Keynesian economics in favor of the neo-liberal market fundamentalist Washington Consensus.”

A neo-liberal, anti-Keynesian, market fundamentalist consensus in Washington?

It seems as if Galbraith (who, according to Wikipedia has written for The Nation, The American Prospect, Mother Jones, The Progressive, The New York Times, Washington Post, Boston Globe, and other publications) is one of the many statists who will never accept that he is part of the intellectual or political establishment.

Ohhh Henry January 23, 2009 at 12:28 pm

“it would have been better to starve these people off the land and to the cities, where, a generation or more later, they would have had higher standards of living. This is the logic of the so-called Austrian School of Economics, taken to its logical and perverse extreme.”

Sounds like a comical parody of the economic writings of Ned Ludd.

That, or some kind of lame justification by a die-hard Marxist for keeping people on state-managed farms long after it is recognized to be a worthless and destructive practice.

If JKG Junior is correct, then shouldn’t his Pop have stayed down on the farm in Dunwich, Ontario instead of moving to the Big Smoke so that future descendants could possibly someday become serious, respected and highly paid economical pundits? Or do you mean to tell me that JKG Sr. actually had a tremendous improvement in his life almost immediately after moving from the farm? No way!

C. Evans January 23, 2009 at 2:40 pm

“If I remember correctly, the reason that people pay for stuff at the supermarket is that someone will grab you and lock your ass in jail if you don’t. Without that use of force there is no way that the private sector could operate.”

I think what this commenter intended to argue was the following: If you choose to go to a grocery store, fill your basket with fruits, vegetables, meats, etc., and then walk out of the store without paying, then a police officer may arrest you and put you in jail.

This commenter’s argument suggests that without police officers willing to beat and imprison people, no one would ever engage in voluntary exchange. All humans would steal and rob whenever they got the chance. Of course, if humanity were that depraved, civilization would never have advanced past hunter-gatherer soceities. Indeed, one could argue that hunter-gatherer societies could not even form.

The argument also assumes that those who possess the monopoly on force, i.e., the police, are not venal beings who will rob and steal as well. But if humanity were as depraved as the commenter suggested, a police force could never come into being because the individuals who became police would be drawn from a pool of mostly corrupt humans. These police would use their powers to rob and steal with impunity.

Marco Costa January 23, 2009 at 3:55 pm

“(…) In other words “fiscal responsibility” in just 9 months led to a landslide fall in the economy back to where it was near the bottom of the Great Depression . 9 months of fiscal responsibility had undone the good work of 4 years of deficits.”

In other news binging on booze is good while you’re at it, but waking up to go to work hungover is bad.

Seriously, I couldn’t believe this fragment when I read it. This individual is hopeless. Not to mention the usual ‘market fundamentalist’ bromide. What about ‘government spending fundamentalist’? Frankly…

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