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Is it Keynes or Is it .... ?

And now, ladies and germs, the "Spit Take of the Week" award winner...

Bob Hettinga

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Date:         Fri, 16 Oct 1998 14:12:55 EDT
Reply-To: Hayek Related Research <[email protected]>
Sender: Hayek Related Research <[email protected]>
From: Hayek-L List Host <[email protected]>
Subject:      Is it Keynes or Is it .... ?
To: [email protected]

 >>   Is It Keynes?   <<    --   The End of Laissez-Faire

"A year or so from now, it will be difficult to find
a single person who admits ever having believed
that a global free market is a sensible way of
running the world economy .. The late-twentieth-
century political fad for the free market arose
at a time when memory of it had faded.  Mid-Victorian
laissez-faire was short-lived .. The free market came
about in England as a result not of slow evolution
but swiftly, as a consequence of the unremitting use
of the power of the state ..  The free market
withered away gradually, thought the natural workings
of democratic political competition ...

The short history of the free market in nineteenth-
century England illustrates a vital truth: Democracy and
the free market are rivals, not allies.  'Democratic
capitalism' -- the vacuous rallying cry of neoconservatives
everywhere -- signifies (or conceals) a deeply
problematic relationship.  The normal concomitant
of free markets is not stable democratic government
but the volatile -- and not always democratic -- politics
of economic insecurity.

History exemplifies an equally important fact:
Free market economies lack built-in stabilizers.
Without effective management by government,
they are liable to recurrent booms and busts --
with all their costs in social cohesion and
political stability.  The Great Depression was
partly an aftershock of the First World War
.. But is was also a consequence of governments'
holding to an orthodoxy that believed that so
long as inflation is under control the economy
can be relied upon to be self-regulating ,,,"

It's John Gray in _The Nation_.  "Not for the First
Time, World Sours on Free Markets", Oct. 19, 1998.

Is it Keynes is special service of the Hayek-L list.

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Robert A. Hettinga <mailto: [email protected]>
Philodox Financial Technology Evangelism <http://www.philodox.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'