And now, ladies and germs, the "Spit Take of the Week" award winner... Cheers, Bob Hettinga --- begin forwarded text Date: Fri, 16 Oct 1998 14:12:55 EDT Reply-To: Hayek Related Research <HAYEK-L@MAELSTROM.STJOHNS.EDU> Sender: Hayek Related Research <HAYEK-L@MAELSTROM.STJOHNS.EDU> From: Hayek-L List Host <HayekList@AOL.COM> Subject: Is it Keynes or Is it .... ? To: HAYEK-L@MAELSTROM.STJOHNS.EDU

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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. --- end forwarded text ----------------- Robert A. Hettinga <mailto: rah@philodox.com> 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'