Posts Tagged ‘The Road to Serfdom’

Are Free Marketers Blind to Tyranny? Part 2

October 19, 2012

In picking up on our discussion of economic tyranny from yesterday, the argument contended that to blindly submit to market forces creates an atmosphere for economic tyranny to arise, every bit as dangerous as political tyranny. This singular belief in markets, to the exclusion of all other considerations, is folly. Both the economic and the political institutions that arise in a society were given space by America’s founders for the betterment of the individual, not the converse.

Economist Wilhelm Röpke noted in The Humane Economy that to focus merely on the economic is to place blinders over our eyes, that

“we have narrowed our angle of vision and do not forget that the market economy is the economic order proper to a definite social structure and to a definite spiritual and moral setting. If we were to neglect the market economy’s characteristic of being merely a part of a spiritual and social total order, we would become guilty of an aberration…” (emphasis added – ed.).

Röpke squarely embeds the economy within the social, within society. (more…)

Are Free Marketers Blind to Tyranny? Part 1

October 18, 2012

All too frequently we hear free marketers in America bemoan regulatory action, suggesting such action actually hampers a sorely needed economic recovery. Free markets, they state, will ultimately sort things out. Yet, do we ever hear these voices caution against economic tyranny? It seems economic tyranny is simply not in their vocabulary. Why?

To blindly submit to market forces creates an atmosphere for economic tyranny to arise, every bit as dangerous as political tyranny. This singular belief in markets, to the exclusion of all other considerations, is folly. Both the economic and the political institutions that arise in a society are there for the betterment of the individual, not the converse. The German American political theorist Hannah Arendt understood this when she observed that

“Free enterprise… is a minor blessing compared with the truly political freedoms, such as freedom of speech and thought, of assembly and association, even under the best of conditions. Economic growth may one day turn out to be a curse rather than a good, and under no conditions can it either lead into freedom or constitute a proof for its existence” (On Revolution, Chp. 6).

Any doubt about these sentiments, written in 1963, can be placed aside when one considers China, a country that has fully embraced capitalism and has taken a commanding lead in global economic growth because of it. Yet, the Chinese enjoy very little in the way of political freedoms. Capitalism does not need political freedom to thrive; in fact, centralized capitalism can create tyrannies of its own.

Economic tyranny arises when the vast majority of citizens are wage laborers. By the very need of an income, wage laborers are at the mercy of centralized economic forces that are seemingly beyond control; one’s fate rests in the hands of others unseen, unknown. Such forces are not part of the “invisible hand” of which Adam Smith spoke. (more…)


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