Road to Serfdom, version 3.0

[This post is from this thread]

For a time back in the 90's I became really interested in libertarian thinking and read many libertarian books and bought into that way of thinking. Since then I came to realize that, although the theories espoused by libertarian writers may be compelling, they don't translate well into the real world. I came to believe it's not possible for free markets to persist in the real world and yield optimal social results. Markets don't exist in a vacuum. The world is not only ‘wanters’ and ‘havers’ engaging in commerce. Markets coexist within a framework containing many other systems: Political systems, legal systems, banking systems, religious systems, energy distribution systems, information distribution systems, road systems, international treaty systems, extended family systems, reputation systems, etc, etc. Some of these system are fairly independent of the market system, others intersect and overlap the market system. The reason unregulated free markets eventually fail in the real world is that unethical people use elements of these other systems to gain huge, unfair advantages within the market system. Some government intervention is necessary to help prevent or correct these unfair advantages and to create stability in the system. Of course, government is another system existing within the overall framework and unethical people work hard at manipulating government to gain advantages in one or more of the other systems. It's a big tangled mess of feedback loops that distort any chance for a truly free market to work well in the long term. In fact, I feel these feedback loops, and the opportunities for manipulation they create, cause all the ‘isms’ (capitalism, libertarianism, socialism, communism, egalitarianism, etc) to fail in the long run, if left untended, unregulated.

If nothing works, then what to do? Well, I didn’t say ‘nothing works’, I said ‘nothing works when left untended’. Therefore, what are needed are tools to monitor the various systems affecting society, the power to do something when corrections are necessary, and the realization that adjustments will need to be continually made as time goes by. IMHO, the tools and power to do that must come from a government that is accountable to its citizens (otherwise government will just become another system manipulated by the powerful). The tools and power can't come the market. The invisible hand is too easily manipulated these days and to hard to hold accountable.

That said, we as citizens can't just sit back and assume government will always do the right thing. Government is subject to manipulation, just as is everything else in the overall framework. It's our responsibility as citizens to make adjustments to government. Sometimes that will mean supporting an expansion of government to prevent or correct unethical behavior in some the other systems within the framework (including the market system), and sometimes pushing for limiting government to correct abuses or bad government policies. Perhpas most importantly we need to take action when our ability to affect government is threatened. If we lose the ability to affect government...well then bad things happen, to say the least. :-)

We must always keep in mind that the world is full of flawed people and imperfect systems and know that the *best* we can do is muddle along, but the worst we can do is sit back and trust everything to just work.