Fairies, Unicorns, and Free-Market Republicans

Russ Roberts, responding to Minority Leader John Boehner's declaration that “the era of big government” has returned:

And what did we have the day and the week and the year and the decade before Obama's address? Ah yes, I remember. The Milton Friedman inspired laissez-faire world of free market capitalism and a limited Jeffersonian state.

I almost feel sorry for the Republicans. They know what their role is supposed to be. Having failed to inhabit the role for the last eight years (and a lot longer) they don't realize how silly they look slipping into the same old costume. It's like a fat man trying to do an ad for a weight loss regimen. It doesn't sell that well.

It would be an understatement to say that the Republicans have lost their free-market credibility. (If they ever really had it in the first place.) Yet politicos, and intelligent laymen, still inexplicably insist on linking the two; this only injures real pro-capitalists: it muddies the waters.

So, let it be said once and for all: Republicans do NOT represent laissez-faire capitalism. There. Now can we please move on?

Know Thy Enemy: John P. Holdren

Obama has chosen John P. Holdren as one of his four science advisers. Holdren is a colleague of fellow neo-Malthusian Paul Ehrlich. Those two, along with John Harte, famously made a wager with Julian Simon on the scarcity of resources that would result from the detonation of The Population Bomb. It turned out that that bomb was a dud: they lost. However, Holdren is still one of the most strident opponents of anyone who disagrees with his claim that there is an impending environmental apocalypse.

While he considers himself a Cassandra, Holdren is squarely in the mainstream. So why does he need to viciously attack those who oppose him? This Cassandra doth protest too much, methinks.

Here's the NYT's John Tierney on Obama's pick.

UPDATE: Tierney elaborates on why Ehrlich and Holdren's loss of the bet is important to the failure of their central thesis.

Know Thy Enemy: The Republican Party

The Republican party deserves the trouncing it has been getting since the election. Its supposed free-market policies are being blamed for the financial mess we're in, when free-market policies were not its cause, and the Republicans have long deserted free-market capitalism, anyway. As John Lewis states in his excellent new article, the Republicans "have ceased to be Republican in anything other than name." The Republican party has turned into the Theocratic-Democratic party. There are very few essential differences between the two major parties (especially in the realm of economics). Nor can there be, since they share the same essential morality. From Lewis' article:

The same Christian doctrine, far from differentiating Republicans from Democrats, is the basis for Republican agreement with Democrats about the welfare state. Republicans have anchored their “compassionate” welfare state in the ethics of Christianity. They have become fiscally indistinguishable from Democrats because Christianity and Marxism share the same moral premise: “give unto the poor” or “to each according to his need.” This premise, whether grounded in dialectical materialism or in biblical spiritualism, tells those who embrace it that they can be moral only by caring for “the least among us” through the sacrifice of others. The “compassionate conservatism” that has motivated Republicans to outspend Democrats in social programs is a search for moral goodness by the standard of altruism: the morality of self-sacrifice.

The Republicans are worse than the Democrats because they co-oped the latter's economic policy while dropping its secularism, thus advocating "against abortion, for prayer in government schools, against embryonic stem-cell research, for religious icons in courthouses, against gay marriage, and for censorship of the media." All of which are incompatible with the political system of capitalism.

The time has come for the Republicans to repudiate any connection to capitalism on the grounds of false advertising. Capitalism is being blamed for the policies of a Republican government when the two have been divorced for decades. The divorce needs to be acknowledged with words, as it's been acknowledged with actions.

Know Thy Enemy: Naomi Klein

This week's New Yorker has an illuminating profile of Naomi Klein, the new Queen of Anti-Capitalism. Klein first became prominent with her anti-corporate tome No Logo, which was notable for being toted around by rockers like Thom Yorke in the early 2000s. Klein's most recent book, The Shock Doctrine, posits that capitalism requires disasters, natural and man-made, to succeed, that economic freedom requires "shocks" to force its unpalatable ideas down the throats of an unsuspecting public.

It would seem, at first blush, that Klein is a threat to capitalism, given her recent popularity. However, Klein's arguments are flimsy and contradictory. Her method is the Big Lie. She distorts history, rather than argue from principle. In fact, Klein can't argue from principle. Socialism has long been proved to be a bankrupt system. Instead, Klein drops context, conflates neo-conservatism with pro-capitalism, and knocks down a straw man named Milton Friedman.

To illustrate my point, here are some excerpts from the New Yorker article. Klein on the recent financial crisis:

On the one hand, the initial reaction to the economic crisis followed her theory—the shock (the bank failures and the market’s nosedive) had inspired the government to attempt to seize unprecedented power (seven hundred billion dollars with no strings attached), claiming that in such a crisis everyone should simply trust it to do the right thing, even though the actions it wanted to take would seem to enrich the wealthiest at the expense of everybody else. That was the textbook part. But the plan wasn’t working. Constituents wrote thousands of outraged letters, and bloggers wrote about how this felt familiar, like the aftermath of September 11th, and how the bailout was the economic equivalent of the Patriot Act. It was just as she had written at the end of the book: memory was shock’s antidote. (Another difference, of course, was that the government wanted to enact not Friedman-style reforms but the opposite: enormous interference in the market. Still, since the point of this interference was to bail out banks, this difference did not strike Klein as of much importance.) [Italics mine.]

The difference didn't strike Klein as important. Of course it didn't. It refutes her argument. Corporatism is not synonymous with capitalism. Swedish historian Johan Norberg further illustrates Klein's distortion of history in his review of The Shock Doctrine:

The strangest thing about Klein's suggestion that crises benefit free markets and limited government is that there is such a long record of the exact opposite. World War I led to communism in Russia; economic depression gave us Nazi Germany. Wars and other disasters are rarely friends of freedom. On the contrary, politicians and government officials often use crises as an opportunity to increase their budgets and powers. As one prominent economist put it while explaining his opposition to war in Iraq: "War is a friend of the state....In time of war, government will take powers and do things that it would not ordinarily do." The economist? Milton Friedman.

Furthermore, Klein's arguments are contradictory. In the New Yorker article she is described as such: "In principle, she is a Keynesian, but she distrusts centralization, institutions, platforms, theories—anything except extremely small, local, ad-hoc, spontaneous initiatives." Anyone who is familiar with Keynesianism knows that it is rooted in "institutions, platforms, theories," albeit the wrong ones. But these quibbles are unimportant to Klein, the same woman who, as is shown in the New Yorker article, is comfortable with appearing on (the massively corporate) MTV. It's anyone's guess what the above "ad-hoc initiatives" would comprise of, given Klein's politics, without "centralization, institutions, platforms, [or] theories [italics mine]."

Klein's true motivation's are revealed when the New Yorker article focuses on her infatuation with Milton Friedman:

Why does Klein place such emphasis on Friedman? Perhaps because she wants to draw a parallel between capitalism and Communism, to make their two histories look as similar as possible, and for that she needs not the messy, pragmatic, ad-hoc capitalism of corporations but the purist, utopian capitalism of the Chicago School. Violent autocrats of the free-market persuasion, though there have been many, have not soiled Friedman’s name in the way that Stalin soiled Marx; somehow, the misdeeds of a Pinochet or a Suharto or a Yeltsin are attributed to these men as individuals—to their lust for power, their greed, their drinking. But Klein holds capitalism guilty of all their sins. Friedman’s followers must no longer get away with shaking their heads when their advisees start killing people, she believes.

It takes such a massive evasion of history, political theory, and philosophy to equate capitalism with communism, that someone as intelligent as Klein has to know better: (Observe, too, that the New Yorker writer states as fact that there have been many "autocrats of the free-market persuasion." It is no coincidence that the author of this fawning article has no idea what constitutes free-market ideology.) What you are witnessing is the Big Lie at work. Norbert's article on Klein for the Cato Institute illustrates Klein's evasion:

Astonishingly, in a book of more than 500 pages, Klein offers almost no argument to the person who isn’t already convinced that free markets are bad. […] A look at the EFW data shows that Klein has it backwards. Poverty and unemployment are lowest in countries with the most economic freedom. In the freest fifth of countries, poverty according to the United Nations is 15.7 percent, and in the rest of the world it is 29.8 percent. Unemployment in the freest quintile is 5.2 percent, which is less than half of what it is in the rest of the world. In the least economically free quintile, filled with the kinds of restrictions on private property, businesses, and trade that Klein claims are ways of helping the people against the powerful, poverty is 37.4 percent and unemployment is 13 percent.

The only way to oppose Naomi Klein is to identify that which she evades: history, theory, facts.