Who Understands The Free Market? Walter Does.

June 25th, 2008 7:02 pm | by Marc Gallagher | Published in Big Government, Economics, Free Market, Individual Responsibility, Politics, Social Security, Socialism, Taxes | 1209Comments2008-06-25+23%3A02%3A40Marc+Gallagher

Walter E. Williams has been one of my favorite columnists over the years. Anytime I open up one of his columns I salivate for the contents. His latest column is another good one. This article finds Williams, as usual, effectively arguing against government intervention in our lives. Here is an excerpt.

Right now Congress tells each American how much should be set aside out of his weekly paycheck for retirement. How can they have the information to know what’s the best use for the $70, or so, taken from you and put into Social Security? Might you benefit more by saving that money to start a business, purchase tutoring lessons for your children, or putting it in a private retirement plan? Unlike congressional control of traffic signals and supermarkets, the effects of Social Security aren’t apparent because we don’t have the information about what people would have been able to accomplish if they were able to keep more of their earnings.

You might argue that saving for retirement is important, but so is saving for a home or your children’s education. Would you want Congress to force us to put money aside for a home or our children’s education?

Read the full column here.

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mike montagne says:

June 25th, 2008 at 9:07 pm (#)

Walter evidently intends to borrow credibility by citing Hayek (as if Hayek’s assertion is credible). He says,

“Nobel Laureate Friedrich Hayek, one of the greatest economists of the 20th century, called it a fatal conceit for anyone to think that a single mind or a single committee can somehow do things better than the spontaneous, unstructured, complex and creative forces of the market.”

What a crock. You say that Williams understands free markets; but when in history has a free market itself solved problems such as inflation/deflation, systemic manipulation of the cost or value of money or property, or inherent multiplication of debt by interest?

Never.

In fact what you are probably calling a free market here itself comprises a resistance to solving these things — all for the contrary sake of predation. Is a man’s promise to another made better by costs imposed by a third which eventually make payment impossible?

Evidently, you say so.

So, under the facade of purported economics which *are* bankrupting us and which are wholly bereft of a single formal proof or theorem (as is exemplified by the article’s assertions), we are made subject to a monetary system which can only multiply debt upon that market and its producers, to whatever degree we must re-borrow principal and interest paid out of the general circulation — thus engendering a perpetual and eventually terminal escalation of debt.

On the one hand, Austrians renounce the whole plausibility of math, either for analysis, solution, or validation. Yet they cite simple mathematic problems such as traffic statistics, and regularly pronounce them insoluble, even while every signal you visit is its mentor’s best solution. That’s a mighty poor excuse for “understanding” “free” markets which never even granted their assent to the central banking systems imposed upon the world.

On the other hand, without qualification, evidently Austrians claim “spontaneous, unstructured, complex and creative forces” better determine solutions or course (whatever, mud) than pragmatic, structured, simplified/solvent efforts which in all true disciplines characterize quality work.

Walter emulates the latter, but he does so to raise the former.

So it just doesn’t hold water, Walter. I don’t even see what you intend to instruct us in. Is it economic rectitude? It can’t be, if you won’t even venture to justify the nature of money. Is it sustainability? It can’t be, unless you can show us how a handful of unassented banks can consume so much of our production for the money they print out of thin air, that we don’t have to re-borrow any interest we have paid out of the general circulation, the perpetuation of which will irreversibly multiply debt in proportion to a circulation.

Yes, I’m aware Austrians *think* they’ve already invalidated “the debt virus theory.” That’s because the author pretended to be its author, of something he didn’t even fully understand, much less could cite correctly.

Austrians pretend there is no such thing as mathematically perfected economy; that interest is justified, even as new money is required to sustain further commerce, and no new money published at virtually no cost whatever can possibly represent earned wealth, at stake at the necessary cost of interest.

Walter says, “The big problem in any system, whether it’s an economic, biological or ecological system, is information, communication and control.”

Those are not atypical issues Walter, which validate purported Austrian economics in its obstruction of solution.

Nor is the Austrian course even in possession of something unique. Given any problem, any true engineer organizes the given information and deduces a solution which engenders the desired control.

We cannot even truly say, much less can we validate the preposterous Austrian notions by asserting, “For congressmen, or a committee they select, to take over control of the nation’s traffic signals requires a massive amount of information that they cannot possibly possess such as traffic flows at intersections, accident experiences and changes in peak and low peak traffic patterns.”

No, Walter. Today especially, we *can* “possess” and even process massive volumes of information.

In fact we do so routinely — except of course if “Austrian economists” get in the way of solving inflation and deflation, systemic manipulation of the cost or value of our credit *to each other*, or inherent multiplication of debt by interest — something the Austrian “somehow” savors.

mike montagne's mathematically perfected economy™ BLOG | » Blog Archive » Response to Walter E. Williams’ Minority View — “Problem of Ignorance” says:

June 25th, 2008 at 9:27 pm (#)

[...] [This article responds to Walter E. Williams’ Minority View — “Problem of Ignorance” at GMU, as further cited at Liberty Maven, “Who Understands The Free Market? Walter Does.”] [...]

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