The Free Market

Quick: what do the following world-famous men have in common: John Kenneth Galbraith, Donald J. Trump, and David Rockefeller? What values could possibly be shared by the socialist economist who got rich by writing best-selling volumes denouncing affluence; the billionaire wheeler-dealer; and the fabulous head of the financially and politically powerful Rockefeller World Empire? 

The broadly held corporation was one of the most important developments of the 19th century. The capital of thou­sands and then millions of stockholders made possible the profitable development of large firms, which enriched not only their owners, but society as a whole.

Any business owner whose employees deliberately set out to harass and even endanger customers could do only one thing: fire the offenders, and maybe sue them for damages as well. Nothing else would be compatible with free-enterprise and private property. But thanks to a whole host of government interventions, unionized companies like Eastern Airlines cannot take the actions that morality and economics would dictate. 

Murray N. Rothbard responds to five questions regarding the savings and loan industry.

The Free Market Reader (Ludwig von Mises Institute, 1988) is a 400-page collection of 76 articles, most of which first appeared in the Free Market newsletter. Since 1982, the Mises Institute has used this medium to promote economic understanding to the general public (although academics like myself enjoy it too). The purpose is to educate people about the need to rid society of the impoverishment and injustice caused by the government.

Under socialism, government builders must fulfill the central plan or else. Quality, which can't be bureaucratically quantified, means nothing; in fact, it is an impediment to turning out the ordered amount of production with the least amount of effort. The result is incredibly flimsy buildings.

One of the ironic but unfortunately enduring legacies of eight years of Reaganism has been the resurrection of Keynesianism. From the late 1930s until the early 1970s, Keynesianism rode high in the economics profession and in the corridors of power in Washington, promising that, so long as Keynesian economists continued at the helm, the blessings of modern macroeconomics would surely bring us permanent prosperity without inflation. Then something happened on the way to Eden: the mighty inflationary recession of 1973–74.

There is no clearer demonstration of the essential identity of the two political parties than their position on the minimum wage. The Democrats propose to raise the legal minimum wage from $3.35 an hour, to which it had been raised by the Reagan administration during its allegedly free-market salad days in 1981. The Republican counter was to allow a "subminimum" wage for teenagers, who, as marginal workers, are the ones who are indeed hardest hit by any legal minimum.

International statists have long dreamed of a world currency and a world central bank. Now it looks as if their dream may come true.

Ronald Reagan's faithful followers claim he has used his skills as the Great Communicator to reverse the growth of Leviathan and inaugurate a new era of liberty and free markets. Reagan himself said, "It is time to check and reverse the growth of government."

Yet after nearly eight years of Reaganism, the clamor for more government intervention in the economy was so formidable that Reagan abandoned the free-market position and acquiesced in further crippling of the economy and our liberties. In fact, the number of free-market achievements by the administration are so few that they can be counted on one hand—with fingers left over.

American families need more affordable child care. But the answer is not more government involvement. When child care is run, funded, and regulated by the government, it can only make the existing problem worse. And it's bad for our liberty as well. 

In the Keynesian tradition, the economic advisors to George Bush and Michael Dukakis share the same intellectual premises, and advocate government power over individuals and businesses, and extensive government intervention in the economy. 

Modern liberalism works in a simple but effective manner: liberals Find Problems. This is not a difficult task, considering that the world abounds with problems waiting to be discovered. At the heart of these problems is the fact that we do not live in the Garden of Eden: that there is a scarcity of resources available for us to achieve all of our desired goals. Thus: there is the Problem of X number [to be discovered by sociological research] of people over 65 with hangnails; and the Problem that there are over 200 million Americans who cannot afford the BMW of their dreams. Having Found the problem, the liberal researcher examines it and worries it until it becomes a full-fledged Crisis. 

The Post Office has been a federal agency since 1775. And since 1872 it has been illegal for anyone but government employees to deliver a letter. In that year, at Post Office behest, Congress outlawed the low-priced, fast delivery of the Pony Express. It was to be the last express service available to regular mail customers. 

Mark Shields, a columnist for the Washington Post, recently wrote of President Reagan's "blind devotion to the doctrine of free trade." If President Reagan has a devotion to free trade, it must be blind because he has been way off the mark. In fact, he has been the most protectionist president since Herbert Hoover.

The supply of labor is limited. We must not allow government to create jobs or we lose the goods and services which otherwise would have come into being. We must reserve precious labor for the important tasks still left undone.

A central bank is incompatible with a free society. For the sake of our economy and our liberty, and of simple justice, we should abolish the Monster, and sow salt in the earth where it stood. In its place we need a real gold standard and non-fraudulent free banking, as Ludwig von Mises outlined, and as the Founding Fathers intended.

The hottest new topic in mathematics, physics, and allied sciences is "chaos theory." It is radical in its implications, but no one can accuse its practitioners of being anti- mathematical, since its highly complex math, including advanced computer graphics, is on the cutting edge of mathematical theory.

But how can anyone deny that the East German or Russian experience is decisive evidence against socialism? The answer lies in creating a arcane theories that make socialism sound reasonable.

Ever since Black, or Meltdown, Monday October 19th, the public has been deluged with irrelevant and contradictory explanations and advice from politicians, economists, financiers, and assorted pundits.

Let's try to sort out and rebut some of the nonsense about the nature, causes, and remedies for the crash.