Tuesday, October 21, 2008

The End of Libertarianism and Other Adventures in Financial Policy Fantasy

Don't blame free markets for the current panic

By Jeffrey A. Miron October 21, 2008 [on Reason.com]

In a recent piece that appeared at Newsweek and his own web publication, Slate Editor in Chief Jacob Weisberg announces "the end of libertarianism."

Responding to commentators who believe that misguided government policies caused or contributed to the current financial mess, Weisberg asserts that the real culprit is the libertarian financial policy (which banned "any infringement of the right to buy and sell") that the U.S. has allegedly pursued in recent years. We're in the midst of "a global economic meltdown made possible by libertarian ideas," writes Weisberg, who adds that intellectually vapid libertarians simply cannot "accept that markets can be irrational, misunderstand risk, and misallocate resources or that financial systems without vigorous government oversight and the capacity for pragmatic intervention constitute a recipe for disaster." Libertarian policies have failed so miserably, he concludes, that it is time to toss libertarianism, like Soviet communism, on the trash bin of history.

Excuse me? Are you serious, Jacob?

Whatever one's views of libertarian policies, the incontrovertible fact is that the U.S. has not pursued such policies. Not in the past 10 years. Not in the past century. Indeed, except for a brief moment before Alexander Hamilton engineered the first U.S. bailout of financial markets, not ever. If the U.S. had truly been the "Libertarian Land" that Weisberg alleges, a huge range of policies that have helped fuel the current situation would have been radically different....

READ MORE on Reason.com.

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