T Nation

Laissez Faire to Blame?

Some excerpts from Reisman. Read the whole thing.

[i]…Laissez-faire capitalism has a definite meaning, which is totally ignored, contradicted, and downright defiled by such statements as those quoted above.

Laissez-faire capitalism is a politico-economic system based on private ownership of the means of production and in which the powers of the state are limited to the protection of the individual’s rights against the initiation of physical force.

This protection applies to the initiation of physical force by other private individuals, by foreign governments, and, most importantly, by the individual’s own government.

This last is accomplished by such means as a written constitution, a system of division of powers and checks and balances, an explicit bill of rights, and eternal vigilance on the part of a citizenry with the right to keep and bear arms.

Under laissez-faire capitalism, the state consists essentially just of a police force, law courts, and a national defense establishment, which deter and combat those who initiate the use of physical force. And nothing more.

The utter absurdity of statements claiming that the present political-economic environment of the United States in some sense represents laissez-faire capitalism becomes as glaringly obvious as anything can be when one keeps in mind the extremely limited role of government under laissez-faire and then considers the following facts about the present-day United States.

  1. Government spending in the United States currently equals more than forty percent of national income, i.e., the sum of all wages and salaries and profits and interest earned in the country.

This is without counting any of the massive off-budget spending such as that on account of the government enterprises Fannie Mae and Freddie Mac. Nor does it count any of the recent spending on assorted “bailouts…”

  1. There are presently fifteen federal cabinet departments, nine of which exist for the very purpose of respectively interfering with housing, transportation, healthcare, education, energy, mining, agriculture, labor, and commerce, and virtually all of which nowadays routinely ride roughshod over one or more important aspects of the economic freedom of the individual.

Under laissez faire capitalism, eleven of the fifteen cabinet departments would cease to exist and only the departments of justice, defense, state, and treasury would remain…

  1. The economic interference of today’s cabinet departments is reinforced and amplified by more than one hundred federal agencies and commissions…

  2. To complete this catalog of government interference and its trampling of any vestige of laissez faire, as of the end of 2007, the last full year for which data are available, the Federal Register contained fully seventy-three thousand pages of detailed government regulations.

This is an increase of more than ten thousand pages since 1978, the very years during which our system, according to one of The New York Times articles quoted above, has been “tilted in favor of business deregulation and against new rules.” Under laissez-faire capitalism, there would be no Federal Register…

What this brief account has shown is that the politico-economic system of the United States today is so far removed from laissez-faire capitalism that it is closer to the system of a police state than to laissez-faire capitalism.

The ability of the media to ignore all of the massive government interference that exists today and to characterize our present economic system as one of laissez-faire and economic freedom marks it as, if not profoundly dishonest, then as nothing less than delusional…[/i]

spot on and quite baffling that this is not better understood. I giggle a little every time I here someone talk about all that nasty deregulation that’s been going on.

It is baffling. The idea that we are currently an unfettered free market - deregulated by Bush, of course - is so much a part of our national political rhetoric that it routinely goes unquestioned; it’s become a kind of “truth” by virtue of its being repeated ad infinitum.

Laissez Faire never existed. Great Britain, the country that basically invented our present economic system, slowly began a process in parliament during the 13th century that generally became known as the “enclosure movement.” It was mother of private property and industrial capitalism. At no point was there Laissez Faire.

Edit: Which of course begs the question. Just what is being chased after? Might as well be unicorns.

[quote]beebuddy wrote:
Laissez Faire never existed. Great Britain, the country that basically invented our present economic system, slowly began a process in parliament during the 13th century that generally became known as the “enclosure movement.” It was mother of private property and industrial capitalism. At no point was there Laissez Faire.

Edit: Which of course begs the question. Just what is being chased after? Might as well be unicorns.[/quote]

You missed the point entirely which is that contrary to what is CONSTANTLY beaten into the heads of the public in the media and leftist politicians (2 sides of the same coin) in this country we are clanking through life as I type this with 800 pounds of government shackling from head to toe.

What we really need now is 800 more pounds eagerly supplied by Pelosi, Reid and Obama. What is almost comically pathetic is envisioning all the lemmings having it dropped at their feet and them putting it on themselves. Gawd have we degenerated into a nation of government step children.

[quote]Tiribulus wrote:
beebuddy wrote:
Laissez Faire never existed. Great Britain, the country that basically invented our present economic system, slowly began a process in parliament during the 13th century that generally became known as the “enclosure movement.” It was mother of private property and industrial capitalism. At no point was there Laissez Faire.

Edit: Which of course begs the question. Just what is being chased after? Might as well be unicorns.

You missed the point entirely which is that contrary to what is CONSTANTLY beaten into the heads of the public in the media and leftist politicians (2 sides of the same coin) in this country we are clanking through life as I type this with 800 pounds of government shackling from head to toe.

What we really need now is 800 more pounds eagerly supplied by Pelosi, Reid and Obama. What is almost comically pathetic is envisioning all the lemmings having it dropped at their feet and them putting it on themselves. Gawd have we degenerated into a nation of government step children.[/quote]

Well we certainly don’t seem to be doing anything about our problems ourselves, unless complaining counts for something.

Why not support fair congressional representation? It’s a lot more real than completely free markets.

[quote]beebuddy wrote:
Laissez Faire never existed. Great Britain, the country that basically invented our present economic system, slowly began a process in parliament during the 13th century that generally became known as the “enclosure movement.”

It was mother of private property and industrial capitalism. At no point was there Laissez Faire.

Edit: Which of course begs the question. Just what is being chased after? Might as well be unicorns.[/quote]

I agree. I also think, however, that the phrase has taken on a different meaning in recent years, much like the word liberal has.

At the start, we were all liberals, classic liberals. But now “liberal” has come to signify the left part of the political spectrum, when it once meant… well, the whole American ideal, Republican and Democrat.

Which is why it should be taken to mean what it has come to signify- a freer hand for businesses free of government oversight. Is it laisseiz faire? Of course not, not by the real definition. But for our purposes, in the context that its used, its accurate.

The real problem is that you can’t even discuss the need for deregulation anymore without being called a George Bush Republican and having a bunch of retarded liberals babble about “the last eight years.”

[quote]belligerent wrote:
The real problem is that you can’t even discuss the need for deregulation anymore without being called a George Bush Republican and having a bunch of retarded liberals babble about “the last eight years.”[/quote]

This has pretty much been my experience at College so far ;D

[quote]Beowolf wrote:
belligerent wrote:
The real problem is that you can’t even discuss the need for deregulation anymore without being called a George Bush Republican and having a bunch of retarded liberals babble about “the last eight years.”

This has pretty much been my experience at College so far ;D[/quote]

This will be the legacy of the neocons- that they encouraged the masses to blame capitalism for problems caused by goverment. Whereas if liberal democrats had been in office for the last eight years, the result would have been largely the same, but at least it would have been obvious to everyone that government is the culprit.

Like it or not, the financial crisis will be viewed by most as being caused by unrestrained capitalism and a lack of government intervention.

People should be listening to what guys like Peter Schiff have to say. Sadly, the sheeple are more likely to swallow crap like this instead: http://www.youtube.com/watch?v=WWKTKhXGrnk

[quote]beebuddy wrote:
Tiribulus wrote:
beebuddy wrote:
Laissez Faire never existed. Great Britain, the country that basically invented our present economic system, slowly began a process in parliament during the 13th century that generally became known as the “enclosure movement.” It was mother of private property and industrial capitalism. At no point was there Laissez Faire.

Edit: Which of course begs the question. Just what is being chased after? Might as well be unicorns.

You missed the point entirely which is that contrary to what is CONSTANTLY beaten into the heads of the public in the media and leftist politicians (2 sides of the same coin) in this country we are clanking through life as I type this with 800 pounds of government shackling from head to toe.

What we really need now is 800 more pounds eagerly supplied by Pelosi, Reid and Obama. What is almost comically pathetic is envisioning all the lemmings having it dropped at their feet and them putting it on themselves. Gawd have we degenerated into a nation of government step children.

Well we certainly don’t seem to be doing anything about our problems ourselves, unless complaining counts for something.

Why not support fair congressional representation? It’s a lot more real than completely free markets.

[/quote]

wrong. it is much easier to limit gov’t than find “fair” representation. Our founding fathers knew this. Many regulatory and legislative failures had good intentions.

[quote]FightinIrish26 wrote:

Which is why it should be taken to mean what it has come to signify- a freer hand for businesses free of government oversight. Is it laisseiz faire? Of course not, not by the real definition. But for our purposes, in the context that its used, its accurate.[/quote]

but this is precisely the opposite of what is actually happening. Regulation is growing almost exponentially. Couple this will the fact that regulation rarely has the overall effect intended, and we have real mess.

[quote]dhickey wrote:
FightinIrish26 wrote:

Which is why it should be taken to mean what it has come to signify- a freer hand for businesses free of government oversight. Is it laisseiz faire? Of course not, not by the real definition. But for our purposes, in the context that its used, its accurate.

but this is precisely the opposite of what is actually happening. Regulation is growing almost exponentially. Couple this will the fact that regulation rarely has the overall effect intended, and we have real mess.[/quote]

ALthough I agree that not all regulation is good, I believe it was a lack of oversight and deregulation that got us into this particular mess.

And aside from this perfect storm of a failure, I don’t think that the economic system is a mess at all. We go through booms and we go through recessions…it’s the name of the game.

[quote]belligerent wrote:
<<< This will be the legacy of the neocons- causing people to blame the market for problems caused by goverment. Whereas if liberal democrats had been in office for the last eight years, the result would have been largely the same, but at least it would have been obvious to everyone that government is the culprit.[/quote]

Absolutely so.

The problem with the last 8 years has been the Republicans largely adopting opposition domestic policies when they had all 3 branches and could have actually taken significant steps to return us to American ideals.

In other words liberal policies have been as destructive as ever only the Republicans have been the ones using them. All the dumbasses populating this land know is Bush was in office so Obama must be better even though Obamanomics are a quantum leap in the direction of the very policies of the last 8 years.

Thank God we have Mccain who is only half a quantum leap in that direction.

Man, we are on a rudderless raft headed for straight the falls.

[quote]Regular Gonzalez wrote:
Like it or not, the financial crisis will be viewed by most as being caused by unrestrained capitalism and a lack of government intervention.

People should be listening to what guys like Peter Schiff have to say. Sadly, the sheeple are more likely to swallow crap like this instead: http://www.youtube.com/watch?v=WWKTKhXGrnk
[/quote]

It was government intervention that laid the ground work for the financial crisis. Force institutions to give loans to people who could not pay them back was the start of this whole thing. The government was basically instituting charity, because when you loan money to people who cannot pay it back, you are not actually loaning it, you are giving it away. Multiply each $100,000+ event by a few million and you have a formula for what we have today. You add to that assholes who rather than writing off the loss, use the non-existent money as collateral, viola! You have this mess. Thanks, Uncle Sam!

[quote]FightinIrish26 wrote:
<<< ALthough I agree that not all regulation is good, I believe it was a lack of oversight and deregulation that got us into this particular mess. >>>[/quote]

And this from a guy who writes off Christianity because of “pillars of salt and talking snakes”?

I’m just shaking my head laughing at my screen. It was the very oversight of the very people we are about to give unchecked control to that fueled this whole thing. Government… period, did what it does best on all but a very few basic functions.

                   [b]DESTROY[/b]

Laissez-faire is an economic ideal. It is not a state of the economy but rather a doctrine that provides a backbone for how governments should allow the market to best serve consumers.

In the purview of a market economy there can only be capitalism or socialism. Any attempt to regulate or seek ownership in the market by government is socialism, or a flavor thereof.

Pure capitalism requires a 100% contractual relationship between the market and consumer as apposed to the hegemonic relationship that currently exists between the market and consumer and the government – for example government not allowing the free exchange of alcohol, tobacco, or firearms is an example of hegemony – by definition those markets are not capitalistic.

[quote]FightinIrish26 wrote:
dhickey wrote:
FightinIrish26 wrote:

Which is why it should be taken to mean what it has come to signify- a freer hand for businesses free of government oversight. Is it laisseiz faire? Of course not, not by the real definition. But for our purposes, in the context that its used, its accurate.

but this is precisely the opposite of what is actually happening. Regulation is growing almost exponentially. Couple this will the fact that regulation rarely has the overall effect intended, and we have real mess.

ALthough I agree that not all regulation is good, I believe it was a lack of oversight and deregulation that got us into this particular mess.

[/quote]
What deregulation to you think has anything to do with the financial markets collapsing?