Turning point?
It’s been really amazing to see so many writers making the connection between our return to 19th-century laissez-faire economics and the present disaster. A pure market can’t reliably set policy goals for the future, even when a relatively small public investment could generate great private wealth. Nothing illustrates this better than our failure to spend $50 million on dam repairs to save New Orleans from destruction.
The more complex industrial society gets, the less we can afford to rely on antique theories that’ve been preserved not because of their usefulness, but because they flatter certain powerful people.
I’ve said it before…Communism and laissez-faire were contemporaries, and they both share a peculiar 19th-century faith that people can build and maintain perfect systems. One has a fantasy government that magically obtains its own prices; the other has a fantasy market that magically makes its own laws. These ideas were new and challenging in the days when both were posed as viable alternatives to feudalism. But one busy and bloody laboratory of a century later, though, I think we can say that anyone pursuing these notions in their original form is either ignorant or self-serving.
The Great Depression and its accompanying war shocked us out of our previous romance with perfect markets. Today, Louisiana’s Governor Blanco–instead of displaying appropriate humility over the shockingly late and disorganized deployment of the National Guard–threatened her own rioting constituents with “battle-tested” troops “fresh back from Iraq.” From a world perspective, the situation is far smaller in scale, but the evidence of systemic flaws is no less damning.
I really recommend Robert Kuttner’s book Everything for Sale, an excellent industry-by-industry account of laissez-faire’s rise, fall, and rise in the United States. I’ve started re-reading it since I first got word that the dam broke.