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The government is currently creating a great deal of moral hazard by bailing out irresponsible lenders and decreasing the amount of perceived risk in the market

The government is currently creating a great deal of moral hazard by bailing out irresponsible lenders and decreasing the amount of perceived risk in the market place. Libertarians are generally opposed to this. When the next crash comes because of this moral hazard, I'm am sure the public will still blame libertarians for it. I still won't think it a fair accusation. I fail to see how it is analogous to the blind Marxists who deny that every Marxist society was really Marxist. Our economy is evidently mixed. Our government controls the money supply and has an explicitly activist macroeconomic policy. Our financial markets are the most regulated markets in any industry except medicine. The two largest mortgage entities in the United States were formerly government agencies. There are plausible reasons why libertarians can deny that the credit crisis is due to markets that were too free. A facile comparison based solely on the structure and not the content of the arguments of the libertarians and the Marxists is not fair.

netcan 18y ago
I think the analogy is a little deeper the just a veneer. At least that is the accusation made here. For one thing, the concept of 'communism' according to Marx is a stateless, classless society. Since communist states were 'states' & ruled by parties which were very similar to a ruling 'class,' I thnk we can call this grounds for appeal. The problem is underlying. Any political theory that needs to be implemented completely, can't be judged based on its components. This means that unless you have a perfect specimen, you can't draw conclusions about its validity from reality. To the communist in question, abolishing individual ownership, collective production, land reform, command economy, etc. might fail, but that doesn't disprove communism. It doesn't even disprove those strategies. They are only expected to succeed within a perfectly Marxist state. The fact that a state would have been better off not implementing any of those policies, is no deterrent. To the libertarian in question, deregulated financial markets, corporate autonomy, free markets, etc. etc. might fail, but that doesn't disprove libertarianism. It doesn't even disprove those strategies. They are only expected to succeed within a perfectly libertarian system. The question is: would the US/Iceland/UK have been better off under more regulated financial markets? If your answer is 'yes, but...if only they were even more regulated & trade was unrestricted &..,' then the analogy is about as strong as these sorts of analogies can get.
- Prrometheus 18y ago
  The existence of some facets of the financial system that were not controlled by the state hardly implies that more state control would have stopped the current crisis. Nor does it imply that less state control would have stopped it. However, I have yet to hear a single new regulation that did not require 20/20 foresight that we could have pursued to avert the credit collapse that we have recently suffered. Our economy is very mixed. Large portions of private money, semi-private money, and government money were sloshing about in the financial sector prior to the credit crisis. Blaming "libertarianism" or "government" for it is silly. Deeper analysis and more careful thought is needed in dissecting the lessons from recent events in the market. Causal links must be proposed and evaluated. Also, I personally don't claim that libertarianism can only work in an unadulterated form. I think rather free markets work pretty damn well now, and that most of them would work better without tinkering from central planners. I don't think you could design an economic order without macroeconomic fluctuations, free or planned. I also don't think any regulator will be smart enough to design an optimal regulation scheme, or that one necessarily exists for a dynamic economy.
  - netcan 18y ago
    My personal opinion isn't interesting really. Neither is the author of this article's. What is interesting is public opinion. That seems to have swung away from deregulation. It is (rightly or wrongly) being blamed for this. In many circles (more so outside The States, I think), non-intervention is tolerated because it works, supposedly. A lot of people have accepted that while it is unfair, unsavoury, & generally unpleasant, but it works. Now it doesn't always work.
    - Prrometheus 18y ago
      I suppose you're right. However, public opinion has been largely formed by the opinions of the regulators. I have never known a regulator to want less power, so libertarians are fighting a lost cause. That's ok, we're used to it. As far as the rest of the world goes, European economic courses focus on the evils of the market and Marxist models of class struggle, so they're pretty much a lost cause too.

netcan 18y ago

I think the analogy is a little deeper the just a veneer. At least that is the accusation made here. For one thing, the concept of 'communism' according to Marx is a stateless, classless society. Since communist states were 'states' & ruled by parties which were very similar to a ruling 'class,' I thnk we can call this grounds for appeal. The problem is underlying. Any political theory that needs to be implemented completely, can't be judged based on its components. This means that unless you have a perfect specimen, you can't draw conclusions about its validity from reality. To the communist in question, abolishing individual ownership, collective production, land reform, command economy, etc. might fail, but that doesn't disprove communism. It doesn't even disprove those strategies. They are only expected to succeed within a perfectly Marxist state. The fact that a state would have been better off not implementing any of those policies, is no deterrent. To the libertarian in question, deregulated financial markets, corporate autonomy, free markets, etc. etc. might fail, but that doesn't disprove libertarianism. It doesn't even disprove those strategies. They are only expected to succeed within a perfectly libertarian system. The question is: would the US/Iceland/UK have been better off under more regulated financial markets? If your answer is 'yes, but...if only they were even more regulated & trade was unrestricted &..,' then the analogy is about as strong as these sorts of analogies can get.

Prrometheus 18y ago
The existence of some facets of the financial system that were not controlled by the state hardly implies that more state control would have stopped the current crisis. Nor does it imply that less state control would have stopped it. However, I have yet to hear a single new regulation that did not require 20/20 foresight that we could have pursued to avert the credit collapse that we have recently suffered. Our economy is very mixed. Large portions of private money, semi-private money, and government money were sloshing about in the financial sector prior to the credit crisis. Blaming "libertarianism" or "government" for it is silly. Deeper analysis and more careful thought is needed in dissecting the lessons from recent events in the market. Causal links must be proposed and evaluated. Also, I personally don't claim that libertarianism can only work in an unadulterated form. I think rather free markets work pretty damn well now, and that most of them would work better without tinkering from central planners. I don't think you could design an economic order without macroeconomic fluctuations, free or planned. I also don't think any regulator will be smart enough to design an optimal regulation scheme, or that one necessarily exists for a dynamic economy.
- netcan 18y ago
  My personal opinion isn't interesting really. Neither is the author of this article's. What is interesting is public opinion. That seems to have swung away from deregulation. It is (rightly or wrongly) being blamed for this. In many circles (more so outside The States, I think), non-intervention is tolerated because it works, supposedly. A lot of people have accepted that while it is unfair, unsavoury, & generally unpleasant, but it works. Now it doesn't always work.
  - Prrometheus 18y ago
    I suppose you're right. However, public opinion has been largely formed by the opinions of the regulators. I have never known a regulator to want less power, so libertarians are fighting a lost cause. That's ok, we're used to it. As far as the rest of the world goes, European economic courses focus on the evils of the market and Marxist models of class struggle, so they're pretty much a lost cause too.