Thursday, March 18, 2010
Constitution of Liberty and FA Hayek
As the economy and liberty go down the slope more people will espouse the teachings of the Austrian School of Economics. An amazingly ignorant posting that essentially demonstrates a lack of understanding of the Austrian position and Hayek in particular.
First. Libertarian ideas draw a clear line between free markets and crony capitalism which is essentially corporativism posing as a free market. Crony capitalism is what is going on in the US at present. You can call it by many names, socialism for the rich, or even facism.
Second. Hayek and all knew that pure free markets do not exist. That is why the Heritage foundation rates countries on a relative basis (mostly free, etc). The goal is to reduce government because government is almost always less efficient than private enterprise and because government is almost always kidnapped by special interests (In other words, socialism is nothing more than the protection of these special interests under the veneer of social benefit)
Third. The deconstruction of the state and of socialism does have short-term negative impacts / dislocations. However, it has huge long-term benefits. The socialist state has immensely negative consequences, that as Hayek correctly predicted, eventually include the loss of freedom. This is why the change must be made, it is also why the change is avoided by politicians.