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Date: Fri, 16 Oct 1998 16:09:02 -0400 From: Robert Hettinga <rah@shipwright.com> Subject: Is it Keynes or Is it .... ?

Date: Fri, 16 Oct 1998 14:12:55 EDT From: Hayek-L List Host <HayekList@AOL.COM> Subject: Is it Keynes or Is it .... ?

"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

No global economy is a good economy, by its very definition it is a monopoly and contrary to the entire precip of free-market pundits. A free-market is exclusively a *local* market.

laissez-faire was short-lived .. The free market came about in England as a result not of slow evolution

No it didn't, it's the basic economic structure that everything else gets built on. You start out with a completely free-market and build from there. Free markets are for cavepeople.

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 ...

No, human psychology is what kills it.

century England illustrates a vital truth: Democracy and the free market are rivals, not allies.

Duh. Economics has nothing to do with civil liberties or crimes. One of the failures in current political and economic thought is the necessity for the *government* to regulate the money. It isn't a new belief either since it is embodies in our Constitution. What is required for a free-market is a mechanism for 'fair competition'. The problem is there is no way under a free-market to define fair or competition.

problematic relationship. The normal concomitant of free markets is not stable democratic government but the volatile -- and not always democratic -- politics of economic insecurity.

This is circular reasoning. A free-market is not compatible to democracy (of course not since a free-market requires two party economic contracts exculsively) but is compatible with a market that is solely stabalized by economic (in)security (which is a free-market economy after all).

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.

Duh...

.. But is was also a consequence of governments' holding to an orthodoxy that believed that so

Governments *are* a form of orthodoxy, they don't hold onto it since they embody the concepts of orthodoxy.

long as inflation is under control the economy can be relied upon to be self-regulating ,,,"

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