"Free markets depend on statist regulations"

[jon_perez]

A very interesting counterpoint to libertarian economic theory by Henry C.K. Liu, I have to admit there is definitely some grain of salt here:

From http://www.safehaven.com/article-4176.htm

"In the United States, the Mecca of free-market entrepreneurship...

Is it still?

...the statist sectors - public finance, defense, health care, social security and public education - have kept the economy afloat in recurring, protracted recessions while entrepreneurial ventures such as corporate finance, insurance, high-tech manufacturing, airlines and communication languish in extended doldrums.

I tend to agree with this admittedly Keynesian outlook...

Unregulated markets lead naturally to monopolistic centralization and abuses in corporate governance and finance.

Again, isn't history replete with examples of such... ?

It is undeniable that "free" markets are inherently self-destructive of their own freedom.

This statement I find a bit strong though...

Free markets depend on enlightened statist regulations to remain free and to prevent them from turning into failed markets.[]

Perhaps true, but only occasionally, is my opinion...

Government, from monarchy to democracy, exists to protect the weak from the strong and to maintain socio-political stability with a just socio-economic order.

This last statement in one sense, jibes strongly with libertarian thinking... (e.g. protect all rights equally) but on the other hand is also opposite to it, in the sense that libertarianism believes that too much government turns government into "the strong that oppresses the weak"

Anyway, much food for thought and debate here..

[dmspilot00]

What point was the author of that article trying to make?

First, the United States is hardly a Mecca for free-market entreprenuership, and hasn't been for almost a century. The author did not back up his assertion that that statist regulations are necessary for free markets. That assertion seems like an oxymoron to me.

[fsk]

Unregulated markets lead naturally to monopolistic centralization and abuses in corporate governance and finance.

Again, isn't history replete with examples of such... ?


There is only one such example of a free market leading to the creation of a state: the formation of the first State.

After the first State was created, the free market was gone.

[TyTodd]

Comments below...

<...the statist sectors - public finance, defense, health care, social security and public education - have kept the economy afloat in recurring, protracted recessions while entrepreneurial ventures such as corporate finance, insurance, high-tech manufacturing, airlines and communication languish in extended doldrums.>

Protracted recessions and boom periods are caused by the FED and the fact that this quasi independent banking body controls the money supply in cohort with the Federal government. See: the roaring '20's, the great depression, the technology stock market boom, the post boom deflation of our economy, and the housing boom. And, regarding the notion that statist sectors do well in a recession is completely true in the sense that the new money that is created by the FED and Congress and injected into the banking system ends up first in big government projects / spending and corporate largesse.

<Unregulated markets lead naturally to monopolistic centralization and abuses in corporate governance and finance.>

Most economists suggest that in a relatively free market, the market will trend toward oligopoly or duopoly. In those cases where we have seen virtual monopolies, such as Standard Oil, these situations were created in part due to government largesse and the fact that the government on some level was complicit in the monopoly.

The statement regarding abuse in governance and finance seems to be alluding to the ENRON scandal and the resulting SOx regulation. I firmly believe, as does Dr. Paul, that SOx is unnecessary, inefficient, and wasteful. The market is completely capable of self regulating, as long as the government doesn't step in and interfere when poor decisions are made. See: the history of banking in the U.S., the FDIC, and the recent sub-prime loan bailouts as examples.

<It is undeniable that "free" markets are inherently self-destructive of their own freedom.>

It is undeniable that this guy is a moron and likes making grandiose statements that are free from actual ideas.

<Free markets depend on enlightened statist regulations to remain free and to prevent them from turning into failed markets.[]>

Not worth responding to...

<Government, from monarchy to democracy, exists to protect the weak from the strong and to maintain socio-political stability with a just socio-economic order.>

Let's dissect this in two parts:

1) Protect the Weak from the Strong - Our government and the constitution were originally designed to protect individuals from the masses. Hence we are a republic. Unfortunately, the statist system espoused by modern big-government vocalists reverses this relationship: government protects the special interests, the corporations living on governmental largesse, and well... the government.

2) Political stability via a Just Economic Order - If he is suggesting that a strong economic system based on free market principles benefits all politically in terms of stability, I would argue he is wise. The problem is that a "just socio-economic order" is assuredly merely veiled socialism. Centralized economic planning doesn't work and hasn't in any country.

[aravoth]

Recessions are a result of horrid regulation on the part of the government.

Unregulated markets lead naturally to monopolistic centralization and abuses in corporate governance and finance.

Uh, yeah, sounds a lot like what the federal reserve is doing. Oh the irony, the one thing regulating the market is monopolistic, centralized, and abuses corporate governance and finance.

It is undeniable that "free" markets are inherently self-destructive of their own freedom.

Was America self destructive with thier own freedom prior to 1913?

Free markets depend on enlightened statist regulations to remain free and to prevent them from turning into failed markets.

Then they are not free markets. Freedom to succeed is also the freedom to fail. And the day an "enlightend statist" comes up with regulations that keep a market free, I'll eat my left pinky toe.

Government, from monarchy to democracy, exists to protect the weak from the strong and to maintain socio-political stability with a just socio-economic order.

Government does not exist to protect the weak, it exists to control the strong and the weak. It exists to regulate. It is a the market's, and the people's arch nemisis. It forces regulations that benefit a few, and steal for the many. I do like how he used "from monarchy to democracy" Since one in tyranny of one, and the other is tyranny of the majority. Which is why we are not a democracy, we are a republic.