We have moved on from London to Prague where tonight was the opening for the Mont Pelerin Society. Half of the Catallaxy crew are here, myself, Sinclair, Alan and Julie, so it’s kind of old home week. But it’s a pleasure to be sitting next to people who are as plugged in as they are on this side of the political divide in the countries they are from.
The attack on free markets comes from every direction. By reading Kahneman’s Thinking, Fast and Slow I have been really made aware of the hostility that comes from a belief that people are “irrational” so that leaving things to the market can never work out. Perusal of titles in just one book store came up with:
Everything is Obvious Once you Know the Answer: How Common Sense Fails
Bounce: the Myth of Talent and the Power of Practice
Predictably Irrational: The Hidden Forces that Shape our Decisions
The Spirit Level: Why Equality is Better for Everyone
How Markets Fail: the Logic of Economics devoted to disproving that “markets are inherently rational”
Luckily I also picked up a copy of Vernon Smith’s Rationality and Economics which explains, for example, why the Czech Republic, having gotten rid of the centralisers and the commissars and the central planners have also found their way to a new prosperity, never mind the freedoms that have come with it. People for some reason are always trying to prove that they can work out how to improve on reality when every experiment in central direction has been a disaster.
We were addressed tonight first by Ken Minogue and then Vaclav Klaus, two of the great philosophers of liberty and freedom. You cannot imagine what a great pleasure it is to be here before having to return to the real world next week.
Very jealous.
But up I pipe to point out that arguing in favour of free markets on the grounds that the “results” will be better, by any measure, or indeed that there will be meaningfully describable “results”, I think, is just the same old socialist/statist shit on the other shoe.
The reason free markets should be supported is because on balance, allowing individuals the freedom to allocate resources they acquired through individual effort and risk, is the most moral thing to do, regardless of outcome.
That individual effort and ingenuity, given free rein, will create a world we are completely incapable of predicting, is the very point of freedom. To not be bound by the expectations or master plans of others who had no part in the creation of my wealth.
Ooh Honey Honey
3 Sep 12 at 8:01 am
The reception Vaclav Klaus got from the ABC when he visited here was typical of their dalek-ish tendency to squawk “exterminate” at anyone who’s insufficiently PC. Here’s Doogue (who says she’s more nuanced) having a go in her smug way, but meeting a superior intellect – worth reading the whole interview:
Geraldine Doogue: Could we talk first about your idea, how much the politics of climate change reminds you of the politics of the communist era in the old Czechoslovakia, please?
Vaclav Klaus: Well, I would like to put it in a mild way, that comparison. You know, I lived, I spent almost half a century of my life in the communist era, where I was forced to accept similar arguments. And I was very angry. I protested, I tried to explain it differently and now I again live in a world of political correctness; in a world when you have one idea you are considered a ‘climate change denier’ or you are considered a ‘sceptic’, and I always try to say that I disagree with those terms, labels, as sceptic, pessimist, denier.
Geraldine Doogue: Ok, look, I understand, because frankly I loathe a lot of those terms too and I am interested in the nuance. But I’m really interested in this, what you see as the overlaps between the politics of the old communist era. Like, I’ve got an interesting quote from the Financial Times here, in a Q&A session back in 2007: ‘Environmentalism is indeed a vehicle for bringing us socialist government at the global level. Again, my life in communism makes me oversensitive in this respect.’
Vaclav Klaus: Yeah.
Geraldine Doogue: I’d really like you to tease that out, please.
Vaclav Klaus: You know, first, I don’t think that the debate about global warming or climate change is a really scientific debate. OK, there is such a debate in science, but what we discussed in the media is the political, ideological debate about the different things; those sort of debates about human society, about our values, about our behaviour. And the people who are now fighting for the so-called climate change are fighting against me about my freedom, about my prosperity, about…
Geraldine Doogue: So you think it’s a political… In other words, you’re suggesting it’s a political idea; it’s not a science idea.
Read it all.
Love that bit about “loathing a lot of those terms too” – very hi Alanist.
blogstrop
3 Sep 12 at 8:09 am
First, hello Steve! I saw your excellent talk at the ASC a couple of years ago, after which I talked to you a little and read your excellent book, cover-to-cover. I’m glad that through Rafe mentioning a blog post of mine here that I now get to see your reflections on Mont Pelerin, etc.
Second, Honey, I agree in the sense that the outcomes, especially of deregulation and other incremental changes, are unpredictable. Selling freeways to private owners may increase the cost of travel by car as the resource becomes economically valued. But I don’t support the moral argument. Rather, I support the idea that human beings will discover the ways of behaving that provide the most happiness and that such discoveries are more likely to be made by individuals acting freely as opposed having them handed down by an “enlightened” master. I think that von Mises was tending in this direction when he called himself a utilitarian.
Finally, Steve, I hope you have lots to tell us over the next days!
Brian J. Gladish
3 Sep 12 at 8:53 am
Stuck here in the office, I can only imagine it. Mind you, if I was in Prague it would be a toss-up between the beer and the discourse…
ar
3 Sep 12 at 9:00 am
Yes, sums it up doesn’t it? You free market types are just living in a fantasy world of your own, totally divorced from the reality of having to survive in an unequal world. Unfortunately the noble socialist experiment of the twentieth century failed because of the hostility brought about by force of arms of the Americans.
hammygar
3 Sep 12 at 9:13 am
The way I see it is that believing or hoping that human beings will do one thing or another is a form of the conceit that Hayek described.
I think the final argument is Mao’s great leap forward. The supposedly dire consequences of letting everyone keep and spend what they make, cannot conceivably be worse that millions starving because one person thought they should melt their pots instead of grow stuff to put in them.
Privately I think that orders do tend to emerge from people acting in self interest, but that’s irrelevant. It is enough to say that it is purely and inherently immoral to presume to know better, and enforce that view, on what to do with something someone else made.
Ooh Honey Honey
3 Sep 12 at 9:18 am
Noble experiment?
Over 100 million people were murdered in its name, you vile commie creep.
You disgust me, hammster.
Rabz
3 Sep 12 at 9:33 am
Could I just put in a plea not to indulge in the troll-feeding which has made some other threads a waste of time for us lurkers?
Eddystone
3 Sep 12 at 9:38 am
Listen pal, I rarely ever engage in ‘troll-feeding’ as you call it, but that was too disgusting a statement to let past without a rebuttal.
Mkay?
Rabz
3 Sep 12 at 9:47 am
No really, I agree with Eddystone. Completely ignore them please.
Ooh Honey Honey
3 Sep 12 at 9:49 am
Mkay, Rabz.
Mods, please delete my earlier comment.
Eddystone
3 Sep 12 at 11:21 am
Eddystone – apologies, not having a go, just explaining my position. No need to delete your comment.
Rabz
3 Sep 12 at 11:23 am
“Bounce: the Myth of Talent and the Power of Practice” is actually about achievement in elite sport. It is a fantastic book IMHO, and not at all a commentary on the ‘failure’ of free markets.
Youngster
3 Sep 12 at 11:28 am
True, Rabz, but I honestly believe that the worst-case outcome for Hammygar-types is to be completely ignored.
Ellen of Tasmania
3 Sep 12 at 11:57 am
Within living memory Billions of people have been lifted out of poverty and 100′s of Millions of lives saved due to abandoning communism and embracing free markets in.
India
China
Vietnam
etc
etc
Nuance that honey!
Max
3 Sep 12 at 1:36 pm
Doesn’t the concepts of the books like that reinforce the benefits of specialisation and reinforce free market principles?
Token
3 Sep 12 at 1:44 pm
So you have just said that a bunch of prison regimes in the Warsaw Pact were “noble”. I’ll be filing that one away for later.
Fisky
3 Sep 12 at 3:01 pm
Which definition of “free market” precludes rationality, you twit? GO!
GDP is a measure of current economic activity while the stock market takes into account expected future earnings. There is no theoretical reason why they should go in tandem. Where do you idiots come up with this stuff?
Sinclair, the Doctrine please.
Fisky
3 Sep 12 at 8:45 pm
Wiki, where else.
Gab
3 Sep 12 at 8:46 pm
Of course it delivers earnings in the form of dividends, but the stock price is also partly based on expectations of future earnings. That’s why the stock market often crashes in anticipation of a recession. You have absolutely no clue, and deserve to be locked up.
Fisky
3 Sep 12 at 8:56 pm
One more thing, Phil – Nidal Hasan. Are you for or against?
Fisky
3 Sep 12 at 9:00 pm
Now you are contradicting what you said earlier. Do you even read the crap you come up with?
Actually, you haven’t proved anything of the sort, because you have demonstrated absolutely no understanding of the thing you are trying to critique.
By the way – what’s your take on Hasan? You are in favour of him, aren’t you?
Fisky
3 Sep 12 at 9:02 pm
Nope, you still have no idea what you are talking about, and you also haven’t answered my question about Nidal Hasan.
Fisky
3 Sep 12 at 9:07 pm
Phil, this is an even bigger train wreck than the previous time when you actually described one of your opinions as “sad”.
Fisky
3 Sep 12 at 9:11 pm
Nope, no evidence for that either, but do keep trying, Hasan-fanboy.
Fisky
3 Sep 12 at 9:16 pm
yep, that’s Phil [spit] alright.
Gab
3 Sep 12 at 9:17 pm
“Capitalism” isn’t a “system”. No one needs to be coerced or indoctrinated. When I was little I asked my Dad what Capitalism was and he pointed to some grass growing through a crack in the pavement and he said “That is Capitalism.”
It is just a derogatory term used by Marxists for people who won’t play along with their program.
Ooh Honey Honey
3 Sep 12 at 9:36 pm