Tuesday, August 12, 2008

Free-Market Optimism vs. Statist Pessimism

Why are optimists about the state of the world disproportionately represented by classical liberals, libertarians, and free-market conservatives, while pessimists about the state of the world are disproportionately represented by statists?

Why do left-leaning media such as the New York Times and CNN devote so much ink and airtime alleging that middle-class Americans have made little or no economic progress over the past 35 years and that the planet continues to spiral into imminent catastrophe?

Why, whenever the New York Times’s Paul Krugman and the Washington Post’s Harold Meyerson write (as they do, almost weekly) that ordinary Americans are trapped in a no-growth economic situation by “the rich” and powerful, do market-oriented bloggers respond with data showing that this claim is false?

And why, whenever the Los Angeles Times or The New Yorker publishes yet another “report” allegedly documenting continuing environmental degradation, do so many market-oriented scholars frequently expose these reports as being factually wrong or poorly reasoned, or both?

George Mason economist Don Boudreaux answers those questions here.

13 Comments:

At 8/12/2008 1:46 PM, Blogger Steve said...

In the conclusion, Don writes, "...the real world’s inability to live up to our fondest imaginations will be described by those on the left as “failure” and serve as an excuse for further limitations on liberty." Would it not also be correct to say "right" as well as, and in addition to "left?" Merely replace environmental issues with "moral" issues and one should be able to apply Don's argument equally well.

 
At 8/12/2008 2:10 PM, Blogger Shawn said...

steve...you're dead on, I believe. :)

Criticizing left and right

 
At 8/12/2008 2:37 PM, Anonymous Anonymous said...

I think you have it completely backwards. All the free market libertarians I know are way MORE pessimistic than statists.

Because the libertarians understand the gravity of the business cycle and the size of the massive credit bubble that was inflated by the Fed.

What's amazing is the free market economists, including you Mr Perry who quotes Hayek and should know better, who don't do ANY analysis about how huge the credit bubble became under the encouragement of the Fed's loose money policy.

The really weirdo "free market" economists/libertarians are the ones who actually support the existence of the Federal Reserve! It's central planning of the basic unit of exchange in the economy, yet the so-called free-marketeers support it!!!!

 
At 8/12/2008 2:43 PM, Anonymous Machiavelli999 said...

anon,

yep yep yep

Although, I do remember Mark give his endorsement to Ron Paul earlier in the campaign season.

 
At 8/12/2008 3:37 PM, Blogger Colin said...

The reason that those on the right are inherently skeptical of the doom mongers of the left is because the gloom and doom is inevitably leveraged to push for a further expansion of government. Perpetual crisis is the mother's milk of the welfare state.

 
At 8/12/2008 4:33 PM, Blogger juandos said...

"I think you have it completely backwards. All the free market libertarians I know are way MORE pessimistic than statists"...

Well that comment begs the question, are they really libertarians or do they just call themselves that because it means not having to say one is either Repug or a dim-Dem?

"Because the libertarians understand the gravity of the business cycle and the size of the massive credit bubble that was inflated by the Fed"...

Hmmm, the very SAME thing was being said back in '67 when I was a sophomore in high school BUT NOT by libertarians...

Conservatives, most especially Constitutional conservatives were saying that very line back then...

Here's another case of what I would consider a thoroughly clueless libertarian as far as history goes: While I agree that Bush's attack on Iraq was both stupid and immoral, many of the reasons that persons on the left (such as Mr. Krugman) offer against military intervention abroad apply equally to "liberals'" case for government intervention domestically...

Obviously Don Boudreaux either wasn't paying attention on purpose or spent way to much time reading the New York Times...

I wonder how old Boudreaux was back in '78 and '79 when Saddam made his rise to power an international act?

I don't judge Ron Paul to be a libertarian, a barking moonbat who like most liberals has at best a very tenuous grasp of history, even recent history...

"Perpetual crisis is the mother's milk of the welfare state"...

AMEN! senor colin...

Dr. Thomas Sowell had a name for it: Stretching the Poor

 
At 8/12/2008 6:46 PM, Blogger Dr. T said...

I agree with anonymous. I'm an intelligent libertarian, critical thinker, skeptic, and atheist who is extremely pessimistic. The world is dominated by a combination of stupid people and people too lazy to think. These people run our governments and most of our industries. They think that ideas spouted by actors are just as important as ideas from top engineers, scientists, and economists. They prefer to believe in fantasies while ignoring the true state of the world around them.

Another reason for libertarians to be pessimistic is the continually recurring idea of 'leveling.' Not the playing field, but outcomes. No one should be poor; no one should be rich. No one should be stupid; no one should be smart. No one should be ugly; no one should be beautiful.

A final reason for pessimism: the continued increase in the number of ways to be categorized as a 'victim'. Skin color, ethnicity, religion, gender, height, weight, age, attractiveness, sensitivity to insults, nose size, hair color, personality type, etc. Victimhood confers benefits, so many people try to attain it.

My optimism will return only after I'm invited to join an independent undersea colony filled with smart libertarians.

 
At 8/12/2008 7:56 PM, Blogger OBloodyHell said...

.

> I think you have it completely backwards. All the free market libertarians I know are way MORE pessimistic than statists.

Thanks for making a claim that doesn't match with any of the "free market libertarians" I know.

My personal anecdote trumps your personal anecdote, so there!!

:-/

Got a source to actually back up your otherwise irrelevant and unvalidated impression? You know, a study of the literature which shows your claim to actually match the reality?

If not, then AAAAAAAAANK.
You lose, insert coin.

> They prefer to believe in fantasies while ignoring the true state of the world around them.

I'm sorry, you confuse the urban poor with the heartland. Most of the heartland knows what a crock of sh** the actors and actresses spout from.

The urban poor equal roughly the same numbers as the heartland, and they are the only reason this country's kept on an even keel as a result.

Not to say those in the heartland don't have their own faults. They tend to be too dogmatic religiosly (as opposed to the social dogma of libtards -- which is just as stupid, just as ill-considered) and so tend towards a measure of daddy-statehood from deciding what moral choices are acceptable in life.

Both notions have value in reasonable measure, both are destructive, though when someone does The Human Thing:

There is no idea, no thought, no feeling, no meme discernable by the human mind -- Not hope not joy not decency not kindness not love not charity -- nothing -- no concept so pristine and all-fired, all-around perfect -- which someone, somewhere, can't take and run straight off the end of the earth with.

This is counterbalanced by The Human Condition, so well evoked by a little, short speech from the 1998 film, Shakespeare In Love:

Philip Henslowe: Mr. Fennyman, allow me to explain about the theatre business. The natural condition is one of insurmountable obstacles on the road to imminent disaster.
Hugh Fennyman: So what do we do?
Philip Henslowe: Nothing. Strangely enough, it all turns out well.
Hugh Fennyman: How?
Philip Henslowe: I don't know. It's a mystery.

It does. We abide. If it ever happens that we stop abiding, well, we won't be concerned with it any more, will we?

Besides which, intelligence is overrated:

I really do believe that the most optimistic thing about the Human Race is its relative stupidity. There would be little hope [for us] if the Human Race was a bright as it thinks it is and STILL got itself into so much trouble.
- Edward de Bono -

.

 
At 8/12/2008 8:37 PM, Blogger juandos said...

"My optimism will return only after I'm invited to join an independent undersea colony filled with smart libertarians"...

Well good luck with that dr. t...

obh says: "Thanks for making a claim that doesn't match with any of the "free market libertarians" I know"...

Hmmm, I see the problem now, one person's libertarian is another person's nut job...

Personally I'm glad there isn't a definitive description of what a libertarian is...

I used to vote Libertarian all the time both locally and on a state level...

I still do most of the time though over the last few years it seems to me that more than a few libertarians sort of quit being libertarians if it interfers with one of their pet projects...

 
At 8/13/2008 8:52 AM, Blogger Dave Narby said...

I define myself as a practical libertarian.

That is, I believe in the least amount of government that is PRACTICAL, not POSSIBLE.

I don't know of anybody in office currently that applies.

Also, this guy seems to be fairly pessimistic... http://www.lewrockwell.com/north/north-arch.html

Personally, I think we're in a cyclical slowdown (happens every 8-16 years or so). But WTF do I know.

 
At 8/14/2008 5:35 AM, Blogger OBloodyHell said...

> Hmmm, I see the problem now, one person's libertarian is another person's nut job...

My point was more along the lines of "anecdotal evidence is inadequate to justify such absolute statements"

I'm not saying you can't note it, but "All the ones *I* know disagree" is pointless. Barack Obama can say "All the ones *I* know disagree", as well as "All the ones *I* know agree" -- he doesn't know -any-.

;-)

 
At 8/14/2008 1:12 PM, Blogger OBloodyHell said...

> http://www.lewrockwell.com/north/north-arch.html

Rockwell ain't been rockin' so well since the Iraq war started, and there's evidence he's had issues for a while now.

Rockwell is the one who is associated with Ron Paul and whose borderline KKK type connections have smeared Paul's reputations in a manner not dissimilar to Obama and Wright.

He's a Misean/Austrian (Auburn University), and as long as he sticks to that he's not a raving loon, but when he gets into other things my own perception is that he's as off the deep end as anyone in Code Pink.

I once wrote to him about 5 years or so ago regarding something he'd written about the Iraqi attitude about the presence of the USA. I pointed out that recent polls had indicated that most people weren't happy with our presence but didn't want us to leave until the mess was cleaned up. That we weren't perceived as "invaders" in the classic sense. His immediate response was a froth at the mouth diatribe of how such polls were taken with armed soldiers nearby and that they could not be trusted in the least as a result of people just saying exactly what they thought we wanted to say.

He literally perceived (and I suspect, still does) that Iraq is the USA being as imperialist as the most lunatic San Francisco Leftard.

As an Austrian, I believe he looks at the Federal Deficit and such as precursors to catastrophe. I won't express too much here as he nominally knows more than I do, but I've noticed that the Austrians I've heard speaking have been making predictions of catastrophe for a decade or so, now, but the engine keeps working differently than they say, for reasons they can't specify... It seems to me that there are issues with their economic models as gaping as those of any Global Warming Alarmists.

That last may just relate to a sub-school of the Austrians. I'm just noting the "absolute doom and gloom" pronouncements I've heard from some of the people at Mises.Org don't seem to tie in with the behavior of the markets (not to suggest those at MO aren't worth paying attention to -- it just appears to me that there are certainly some catastrophists who associate with them adn who aren't doing a good job predicting market behavior).

P.S. Dr. Perry, if you'd chime in on the above observations, I'd appreciate your perspective.

I don't particularly feel comfortable tossing my own admittedly limited understanding of economics against a whole collection of presumably smart academics -- esp. when a lot of what they say makes a certain sense -- but there are certainly areas where it seems they have reality-connection issues as bad as any Keynesians.

I tend to be a strong proponent of The Swartzberg Test:
The validity of a science is its ability to predict.

And so far, at least some of the Austrians don't seem to be doing a good job of predicting.

 
At 8/14/2008 7:30 PM, Blogger Jack McHugh said...

Reminds me of David Mamet's "mugged by reality" conversion essay:

". . . This is, to me, the synthesis of this worldview with which I now found myself disenchanted: that everything is always wrong.

"But in my life, a brief review revealed, everything was not always wrong, and neither was nor is always wrong in the community in which I live, or in my country. Further, it was not always wrong in previous communities in which I lived, and among the various and mobile classes of which I was at various times a part."

http://www.villagevoice.com/2008-03-11/news/why-i-am-no-longer-a-brain-dead-liberal/1

 

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