I can only imagine the courage one must summon to abandon the free market and say exactly what the political sector and the media want to hear, but Richard Posner is about to do just that. His forthcoming book is called A Failure of Capitalism. I know you’ll be shocked to hear this about a book with a title like that, but it calls for “new regulation of the financial markets.” That’s the kind of stunning originality that Harvard University Press is evidently looking for these days. Left unasked, as usual, is whether the financial markets as they exist today might in fact be fatally deformed by the presence of the Fed and other government factors, and that what we need may not be “new regulation” but an altogether new, genuinely free-market paradigm (how I hate that word) for the economy. (Thanks to Bob Murphy for the link.)
Source link: http://archive.mises.org/9527/another-free-market-intellectual-has-second-thoughts/
Another “Free Market” Intellectual Has Second Thoughts
Previous post: Help us with the site
Next post: “Grounding Political Debate,” by Benjamin Marks (Libertarian Papers)
{ 21 comments }
Ugh…when will the madness end. I guess we must dig in and work for the long term…the rush to socialism is disheartening at this point.
Keep-up the good fight at mises.org. We will do our small part as you do your big part.
Amazing how practically nobody but the writers at Mises.org and a few others ever bother to question the existence of the Fed. The “conventional wisdom” (to borrow Galbraith’s term) is that Alan Greenspan and the Republican party are free market. I don’t think we’ll get very far till we can somehow convince everyone how wrong that is.
I believe I now understand why so many press outlets are going out of business and filing bankruptcy. Perhaps the issue that the mass media of yesterday has been uncovered for the fraud that it is and the People are seeing throuh the lies.
Our day is coming as paper money is doing what it was designed to do and that is to die. Will we have a voice at the table of solutions when this takes place?
I will do everything in my power to assist in finding us a chair for that table of conversation.
Paradigm, paradigm, paradigm!
All kidding aside, this is to be expected and it will continue to happen. I’m not going to lose my cool because Richard Posner’s gone over to the shallow side of the pool. By the way, Mr. Woods, has Meltdown cracked the Top Ten yet? Those kinds of breakthroughs are what I’ll be focusing on for the immediate future.
Could they be Voltaire’s Candide?
We live in the best of all possible worlds because that is how I have been taught.
Tom, have you considered mailing Dr. Posner a copy of Meltdown? Might be good for a few laughs, at least.
I wonder what Posner will say once he’s proven wrong?
His cowardice reminds me of Matthew Buckley’s ability to vote for Obama and then start to criticize the Obama administration.
darjen,
There is an excellent pdf document written by Joanne Nova called “the Skeptics Handbook”. It’s a handbook for winning a debate about ‘global warming’ in the style of telling you that if you’re debating, stick to the winnable 1,2,3,4 points, challenge assertions for proof, etc. But there isn’t such a treatment about many subjects like the Fed or the economy in general.
In my opinion many of the folks who come to sites like this have a certain intellectual interest. Recently, I’ve been able to debate and had some success pointing to the Fed as the problem. But I’ve been studying material for 4 or 5 years. I think that we need to speed that up and expand the number worthy debaters much faster.
Robert, maybe someone needs to produce a handbook on how to debate certain subjects. It’s Worth at least hearing opinions on the idea.
Posner now and then gives his opinion of the work of Hayek — but every time he does what it looks like to me is that Posner has never read any Hayek.
I’m guessing the guy is so productive in part because he’s so superficial.
With most individuals, when there is money to be made, influence to be extended, and power to be increased, the facts, reason, and truth are inevitable casualties.
…the rush to socialism is disheartening at this point.
Fear not. The economic course we’ve been on for the last 40 years only leads to one place.
Frankly, the faster & more head-long we dive into socialism, the more poigniant the lessons will be for those who survive & rebuild.
Just ensure you’re prepared to be one of those survivors.
Here’s my theory on why Posner is doing this. He’s sick of losing in debates with Walter Block and so he’s pursuing something in economics which the likes of Block will never achieve, because they would never sell out their principles: a Nobel. Like Krugman, he’ll accomplish this by writing this book, thus kissing the establishment’s collective hindquarters to such an extent that he should be a shoe-in for the prize.
I’m on to your plan, Posner!
I think the best way to make a point for the principle of the free market doesn’t have to involve much economics. Actually, people these days, especially young people, are becoming extremely frustruted by the effects of planning. They see it in their public schools, they see the moronic psychologists and statists treat them like inanimate gas particles ignoring that they use reason for their choices.
The very philosophy that is behind everything from putting school kids on medication for minor personality differences and giving bailouts to corporations needs to be questioned.
Realty has a way of asserting itself in the long run. Posner will have to convince himself that he can fly someday. Then he will crash to the ground like all of the other charlatans.
Material on Posner’s blog several months ago indicated that he was seriously clueless. Old age or Burris-like end of career careerism, I guess.
Too bad, he coulda beena contendah.
(To beat the spam filter, I’m trying again without links. The chief post I refer to can be found by clicking on my name)
Tom, it’s hard to judge an unpublished book, but I suspect you’re right to do so. Has Posner given any more solid clues as to where he’s headed?
However, as it’s clear that things went wrong, I can’t help but wonder when can we expect to hear more from you and others on what government factors (besides the Fed, Freddie and Fannie) “fatally deformed” the financial markets, and laying out a “new, genuinely free-market paradigm for the economy”. Isn’t there a good book or two in there from Austrians?
It seems to me that that James Glassman and William Nolan have a key insight into the type of reforms needed in a WSJ piece that refers to von Hayek. They argue that “an irresponsible attitude toward risk led to terrible mistakes in judgment” and conclude that “bankers need more skin in the game”. How to move in that direction? Glassman and Nolan point to the success of the Brown Brothers Harriman partnership, which lacks the limited liability feature of modern corporations:
[link deleted]
As I have argued in a series of posts, starting with my review of Huebert and Block’s criticisms of Long, the state grant of limited liability to shareholders (in particular the grant vis-a-vis those injured by corporate acts and involuntary creditors, which is a pure grant from the state and cannot be contracted for) has led to a number of perverse results, which can be fairly clearly seen in the financial crisis:
[link deleted]
TT
gooddebate, if you are really interested in understanding climate science (rather than “winning the debate”), then I suggest that you DON’T rely on a .pdf by self-described “professional speaker, TV host, radio presenter and book author” Joanne Nova.
I understand that Nova is the partner of another non-climate-scientist/expert David Evans, whose writings graced this blog in December 2007 (linked at my name above), and that her arguments echo his. It’s worth looking through the various debunkings of Nova and Evans that Tim Lambert has linked to at his Deltoid blog (add the http:// at the front):
scienceblogs.com/deltoid/2008/12/skeptics_handbook_not_novel_no.php
Sincerely,
TT
Since this article is about a book that is not yet available, not much can be said about the book and the article does not say much. However, there is a post on the Posner-Becker blog which gives more substantial information about Posner’s (not so new) creed : http://www.becker-posner-blog.com/archives/2009/02/against_the_pay.html#comments.
It is frankly pro-bailout. Fortunately, he does not even try to sound libertarian. His best argument against Obama’s pay cap is, according to himself, that “It may cause senior management at some banks to refuse a bailout, to the detriment of recovery from the depression.” Wow.
And he just takes for granted without explanation that getting us out of the depression “can be done only by an active monetary policy, by recapitalizing the banking industry, and by a stimulus program (because the first two policies are not working well)–that is, by trying to stimulate demand for goods and services by putting unemployed or underemployed labor and other resources to work, as by a public-works program, the idea being that if private demand falls below supply, the equilibrium can be restored by substituting public demand for the missing private demand.”
It then seems that Posner is not even a chicagoite anymore, but an orthodox keynesian.
Sir:
It would be beneficial for you to hold your evaluations of Posner’s book until you actually have the chance to read it. I have, and, to little surprise, Posner’s view is rather more nuanced than your throwaway summary suggests. Would you expect anything less from a man of his intellect? You certainly shouldn’t.
I acknowledge that we may be dealing with a bit of pre-release pr from HUP. However, you’d do well to avoid sullying the man and his work before you’ve had the privilege of reading it.
Certainly though, neither he nor anyone of reasonable spirits that I’ve met advocates a COMPLETELY free market–that ephemeral concept which exists nowhere on the face of the earth. I’m a rather conservative (or, in the old-fashioned sense, ‘liberal’) man myself, economically and politically. Even I don’t subscribe to the obtuse nature that ‘pure’ free markets are the solution; I doubt they could ever exist if human interaction is involved.
However, having said that, since you have such an incisive take on both a market form that has never existed and a book you haven’t read, I’d invite you to publish your own counter-work. Let us know when it’s ready and we’ll begin to offer our views prior to having read it!
Dear “Chicago School,”
Are you suggesting that Harvard University Press can’t describe its own book? And as a matter of fact, we here generally do support the free market, fully and consistently. We are not inclined to believe that the initiation of violence against innocents is an unavoidable fact of the social order. We have rather more confidence in the ability of free individuals to reach mutually satisfactory solutions to various problems.
Now presumably HUP can describe the basic thesis of a book competently. If it can’t, wouldn’t you agree that Posner should discontinue his relationship with HUP immediately?
If Posner does in fact call for massive regulation of the financial markets instead of offering the more fundamental critique of the system that I am suggesting, will you come back and apologize, since that’s very obviously what the title of his book and the pre-release info from HUP plainly indicated?
And spare me the lectures about Posner’s intellect. Einstein was pretty smart, but when he spoke out of turn he, too, said some pretty stupid things.
And as a matter of fact, I _have_ written a counter-work. You’ll find it at #11 in hardcover nonfiction on this coming Sunday’s New York Times bestseller list.
Ha, Tokyo Tom – Sure read, Deltoid – then read why spin-meister Tim needs a few lessons in logic. “When it comes to backing up the giant patronizing put-downs, it amounts to nit-picking phraseology; irrelevant points; straw men; his own false understanding of what a fingerprint is; and then an own goal when he drops in a graph that shows that the hot-spot is indeed missing.” I don’t claim to be a climate expert, but I don’t need to be either to spot an argument by authority or ignorance, or an ad hominem attack.
Gooddebate: I’m glad you like the Skeptics Handbook. Yes I’d love to write a Handbook for the economy. But I’m an unfunded soul tackling one giant fraud at a time… I’ve already got cartoons about money supply (it’s too easy), just not much time (or money). But you’re right, it’s a very worthy project. Get in touch!
Comments on this entry are closed.