The free market is not a panacea. It does not eliminate old age, and it won't guarantee you a date for Saturday night. Private enterprise is fully capable of awful screw-ups. But both theory and practice indicate that its screw-ups are less pervasive and more easily corrected than those of government enterprises, including regulatory ones.
Mainstream economists are especially critical of Austrians for their lack of desire to incorporate mathematics in general, and multivariable calculus in particular, into their economic analysis. The criticism goes something like this: It does not matter whether or not mathematics is the most appropriate tool to describe economic human action. What matters is that most economists do use math, it has passed the "market test," and, therefore, it is the correct tool to use.
While it is morally reprehensible to hate, in a true free market the freedom of citizens to associate with whom they wish must be upheld and private property rights must be enforced. There should be neither forced association nor forced disassociation. This is the social foundation of the free-market economy.
Typical Ph.D. economics student may be able to tell you lots about Kuhn-Tucker conditions, Hamiltonians, optimal control theory, undetermined coefficients, differential equations, and the like. They may speak fluently the language of mathematics and speak of sophisticated programs in GAUSS, SAS, and STATA. They may look at you with a curious bewilderment, however, upon the mention of Adam Smith. Perhaps you know of him.
In all the commentary on Patrick J. Buchanan's new book (The Death of the West, NY: Thomas Dunne Books, 2002), has anyone discussed his silly economic fallacies and highly interventionist policy agenda? This is the conservative book of the year, the core thesis of which (the West needs higher rates of population increase to keep up with the Third World) impacts very strongly on economic issues.
While many pundits are fond of declaring that capital drives up medical costs, they simply are not being truthful. As one with even a rudimentary understanding of economics knows, capital has the effect of reducing unit costs. It would make no sense to acquire capital, otherwise.
A heritage of honesty and hard work are marvelous tools for papering over the failures of welfarism and subtle servitude. With the right attitude, a prison population can settle into a comfortable and egalitarian existence, one that might even impress Queen Catherine passing by on a boat. Such is the case in Denmark today.
Using changes in the margin regulation as a stick to beat the stock bubble does not work, fails to solve the underlying problem, and further injures investors by restricting their choices. What Fed Chairman Greenspan didn't know is something that the young Greenspan and his mentor Ludwig von Mises did: that monetary freedom is the way to end market bubbles once and for all.
Is it any wonder that under the leadership of a supposed conservative administration, the alleged nemesis of the tax-and-spend liberal democrats in government, we are now seeing increases in all varieties of bureaucratic budgets and the creation of new federal projects and even of federal agencies? If there is money to be gotten for cheap, public officials will go for it, never mind their alleged commitment to public service or their oath of office or what have you!
It is the widespread view in academia that John Maynard Keynes was a model classical liberal in the tradition of Locke, Jefferson, and Tocqueville. But if Keynes was such a model champion of the free society, how can we account for his peculiar comments in 1933 endorsing the social "experiments" that were going on at the time in Italy, Germany, and Russia? And what about his strange introduction to the 1936 German translation of General Theory, where he writes that his approach to economic policy is much better suited to a totalitarian state such as that run by the Nazis?
