Liberty Alone

I’ve recently discovered that two of my favourite econ blogs, Marginal Revolution and Cafe Hayek are both products of George Mason University.

Recently there’s been a bit of interest in Masonomics around the blogs, and the basic philosophy chimes with my views on economics.

The original article is here and the key phrase for me is:

At the University of Chicago, economists lean to the right of the economics profession. They are known for saying, in effect, “Markets work well. Use the market.”

At MIT and other bastions of mainstream economics, most economists are to the left of center but to the right of the academic community as a whole. These economists are known for saying, in effect, “Markets fail. Use government.”

Masonomics says, “Markets fail. Use markets.”

Which is then followed a few paragraphs later by this

Masonomics worries much more about government failure than market failure. Governments do not face competitive pressure. They are immune from the “creative destruction” of entrepreneurial innovation. In the market, ineffective firms go out of business. In government, ineffective programs develop powerful constituent groups with a stake in their perpetuation.

All in all its a very very liberal way of looking at economics. It is about individuals, lose the we is a good slogan. That doesn’t mean that charity and kindness aren’t good, they are, but we should not look to government to make proposals to make us feel good, we should do the good ourselves.

This approach is reminiscent of some of the approach of the Austrian Economists, including F.A. Hayek and Ludwig von Mises, both of whom were dedicated to the cause of freedom and liberty as ends and the means to prosperity for all.

The skepticism of government power is something sorely missing from modern economics, often due to the reasons outlined in Hayek’s The Intellectuals and Socialism (pdf). Liberals the world over need to rediscover that market failure is not a reason for government intervention and that government will not be our saviour.

It is with great sadness that I look at the events in Venezuela, Hugo Chavez is taking more and more power, he now officially has the power of rule by decree (before he had to rubber stamp things through the parliament crammed with his supporters). He has abolished term limits, setting himself up to be dictator for life (I’m sure there’ll be ‘elections’ but the USSR had ‘elections’, even North Korea has ‘elections’).
He’s restricting free speech and the freedom of the press, he’s nationalising the economy.

The scenario of F.A. Hayek’s The Road To Serfdom is being played out again, before our very eyes.

The Social Democracy he once espoused has given way (as it must) to authoritarianism. A solution is ‘needed’ to the problems caused by his own policies, and he is that solution. He’s setting up a false enemy, calling George W Bush ‘Satan’ and making America into a scapegoat (I suppose at least its not an internal minority - although perhaps that’s still to come).
His rhetoric is the rhetoric of the fascist - ‘Fatherland, Socialism or Death!’,

Even through this, the left are still clinging to their new hero. They are claiming a golden age of socialism will arise in Venezuela, showing those evil Americans (who are authoritarian, Chavez clearly isn’t) what a mistake they’re making. They’re even claiming that the USSR didn’t fail because of its economy being fatally flawed and that somehow freedom will be expanded by reducing it.

I feel a great sense of pity for those who will be impoverished by the nationalist and socialist policies of Chavez, but I hold those who sit in their comfy, middle-class houses making pronouncements about the wonders of socialism, in the deepest contempt.