Huffington Proclaims the Death of Free Market-ism (Film at 11)

Seen at HuffPo:

The collapse of Communism as a political system sounded the death knell for Marxism as an ideology. But while laissez-faire capitalism has been a monumental failure in practice, and soundly defeated at the polls, the ideology is still alive and kicking.

The only place you can find an American Marxist these days is teaching a college linguistic theory class. But you can find all manner of free market fundamentalists still on the Senate floor or in Governor’s mansions or showing up on TV trying to peddle the deregulation snake oil. […]

It’s time to drive the final nail into the coffin of laissez-faire capitalism by treating it like the discredited ideology it inarguably is. If not, the Dr. Frankensteins of the right will surely try to revive the monster and send it marauding through our economy once again.

I’ve seen various rumblings of outrage on various right-leaning blogs I follow, interpreting this as an example of how ascendant Dems/progressives must be stopped as they intend to bring that evil European socialism to the U.S.

While I’m a fan of free market theory…I wouldn’t go quite that far.

Free market theory is just that – a theory.  It relies on certain assumptions that may or may not be true in the real world.   If unrealistic assumptions are addressed, a reasonable approximation of a free market can be assumed.  But, if unrealistic assumptions are ignored, disaster can ensue.

You know, I could argue that there isn’t necessarily anything wrong with Marxism as a theory (if you ignore connotation and unfortunate historic associations).  Pure Marxism doesn’t translate well into reality, however, for many reasons, including the theory’s reliance on human altrusim and industriousness.   Too many people operate from an egocentric viewpoint and are too lazy for pure Marxism to be successful.

Similarly, a pure form of free market theory requires people to behave rationally, for complete information to be available, and for that information to be interpreted accurately.  In reality, many people are irrational, information flows can be inefficient, and we have a tendency to be dumb (especially when presented with information contrary to preconceived notions).

I’m somewhat disappointed by Ariana’s failure to advocate a middle path with her editorial.  As a result, it’s far too easy to take that article as just another voice on one side of yet another squabble between polarized ideological viewpoints.   A call for moderation would have been welcome.   Perhaps we can tap Paris Hilton to inject another dose of reality into the debate?

In spite of the financiapocalypse, I don’t believe there’s anything wrong with pursuing free market theory (diluted for reality), in much the same way that socialism-diluted-for-reality seems to work tolerably for Europeans.  I’d hate to see American traditions of individual liberty and entrepreneurship sacrificed in misplaced fondness for Europeishness.

I agree with the notion that absolute deregulation is probably not a good idea, in view of the realities of human nature.  However, it is my (naïve) hope that the move toward reregulation is done thoughtfully.  Let’s pursue regulation provides the necessary cushions to permit pursuit of a realistic dilution of free market theory, rather than one that disincents innovation and hard work.

Or, to put it bluntly, I’m not sure that we necessarily need to regulate to protect people from themselves.   Darwin’s theories should work pretty well at reducing stupidity in society.  Instead, let’s have regulation that protects people from their neighbors’ stupidity, and work to enable people to be less stupid through more effective practical education.