Don’t Blame Laissez-Faire

Libertarians are often dismayed at the fact that the free market almost always takes the blame for government intervention in the economy. The current economic crisis, featuring a stock market meltdown, housing meltdown, credit crunch, and massive job losses (just to top the list) is a one hundred percent “Made In Washington” product.

Yet it is always the concept of the free market and laissez-faire that takes the blame for what can best be called economic corporatism, which is a polite way of saying fascism.

The Bush administration, the Republican Party, and a large percentage of “Conservatives” (especially the vile subspecies called “Neo-Conservatives”) are all advocates–not of free markets and laissez-faire, but of what they frequently call “business-government partnership.”

The real tragedy of all this is that Republicans mouth talking points that seem to be vaguely free-market-oriented, when it is politically convenient to do so. Then, they act in the opposite manner, giving special favors and working the monetary system to help out their buddies in the big corporate world (who also, not incidentally, provide political support and campaign contributions).

In this way, Republicans and conservatives are much, much more harmful to the cause of economic liberty than are Democrats and liberals. In effect, Democrats and Liberals conflate the free market with economic fascism. Republicans and conservatives do everything in their power to prove the conflation correct.

In a brief blog such as this, there is no time or space to catalog, in a single piece, the thousands of ways the government intervenes in the economy. But to put it briefly–surely you don’t believe the federal government can take well over 20 percent of the GNP and not intervene, do you?

The stock market is NOT a free market. It is very highly regulated through the SEC and other agencies. The housing market is NOT a free market. It is regulated through the banking industry, which is regulated by the Federal Reserve. And then there are the effects of quasi-private entities like Fannie Mae and Freddie Mac, one of whose jobs is to buy up bad home loans, also known as “socializing risk.” This is practically the definition of fascism.

For a lengthier discussion of the many ways government has caused the current crisis, check out .

The solution to the crisis, long-term, is to get the government out of the business of creating money; that is, money should consist of gold and silver coins that cannot be created out of thin air. When banksters lend money, they should only be allowed to do so on time deposits, in which the investor is fully aware of the period of time in which the deposits cannot be withdrawn, and the degree of risk involved in the investment. The current system, featuring so-called “double-entry bookkeeping” and “fractional reserve banking,” is inherently dishonest and corrupt, and inevitably leads to bubbles and busts.

Whenever you read, in the coming years, that “Laissez Faire has failed,” or “the free market has failed,” remember that what the writer really means is “Corporatism has failed” or “Fascism has failed.” Don’t fall into the trap of conflating the two words, which have almost opposite meanings.