Home > Austrian Economics, Keynesian Economics > More on Laissez-Faire

More on Laissez-Faire

Charles Rowley’s blog has an excellent post on Laissez-Faire Capitalism. I highly encourage everyone to read.

The United States never adhered unconditionally to the doctrine of laissez-faire, either theoretically or practically. Tariffs were key revenue-raising components of American trade policy almost from the country’s independence.

It’s important to remember that.

The “failure” of laissez-faire capitalism is often the excuse used for ever more and more Government intervention in not only the economy but in people personal lives as well (Health Care Reform). When you realize that we never even had a laissez-faire in the first place, those criticism falls flat on it’s face.

  1. yttik
    April 1, 2010 at 10:32

    I’ve never really understood all the cries about how capitalism must be regulated. It is already tightly regulated in the US and actually becoming quite cumbersome. Ask anybody who has a small business.

    I think it was Stossel who once did a show portraying different country’s experiences with capitalism. Hong Kong was really thriving and in order to start a business all you had to do was get a 15 dollar license which took about 45 minutes. Then you went on to pay a flat tax and that was the extent of your bureaucracy. Business was booming, unemployment was low, you could become a business owner in one afternoon. He contrasted that to India, where you practically need an act of parliament to start a business, a process that would take years and require you to prove that your business idea was going to be good for the country. Needless to say, there was a lot of poverty and unemployment in India, not to mention wage exploitation. In some countries, the Gov has actually built marketplaces where people can get an indoor stall to sell their wares. Instant elimination of unemployment, again with a very simple tax code.

    The US falls somewhere in between, but one thing that’s become a real obstacle is regulation and bureaucracy. The amount of capital you need to start a business has become prohibitive for many, as well as the need to hire somebody to wade thru all the paperwork and tax codes. It practically takes a accountant just to run a lemonade stand and to do it legally you need a few thousand dollars for licenses, fees, and inspections before you can even sell your first glass.

    When unemployment started skyrocketting I thought they should have waved business license fees, waved self employment tax, and encouraged people to start small businesses. Here you are unemployed with the perfect opportunity to go for it. But of course the US Gov would never go for that, instead they want unemployment extensions and where does all that money come from? Those businesses that are already barely hanging on. Ourselves, we can’t hire anybody at this point, the payroll taxes in my state have doubled. Somebody has to pay for all those people to remain on unemployment for 18 months. It’s the gov trying to “fix” things that has caused us the most harm.

    • April 2, 2010 at 06:56

      I think the ignorance about capitalism is a direct result of the education system we have. We are taught in school how great Government is and how evil capitalism is. So it’s no wonder why, when we get out of school, most people see capitalism in that same black and white mentality, where everything is the fault of capitalists and government is “needed” to fix the problem. The real world be damned!

  2. PJ
    April 3, 2010 at 23:11

    It seems to me that corporations are as big a threat to individual freedom as big government. Most people basically have two choices – either work for the government machine or work for the corporate machine. Or maybe they are one in the same – which the health care scam seems to indicate. And also the bank bailouts.

    As always, I am worried about the middle class. I believe it’s the middle class that keeps a “1984” situation from happening. But, we are getting hit hard by a corrupt government and yes, evil corporations. Or, maybe they are one in the same.

  3. April 4, 2010 at 06:14

    PJ :

    It seems to me that corporations are as big a threat to individual freedom as big government. Most people basically have two choices – either work for the government machine or work for the corporate machine.

    See I totally disagree. Corporations have a big disadvantage, they can’t force anyone to do anything. Corporations have more than a few checks to their power, organized labor, consumers able to boycott, competition and, of course, Government regulation.

    Government on the other hand, as this Congress has shown this year, has essentially no checks to what they can do. Sure they can get voted out every two years, but in the interim, they have unchecked power especially with a willing POTUS. SCOTUS can’t even try to put a check on their power until someone brings up a suit. Even then, they have sided with Government since the 30’s (Another consequence of the New Deal).

    More over, Government has a monopoly on the use of coercion, to force you to do what they want. Corporations do not, especially on the scale that Government can. I mean who is forcing you to buy the products you buy? Does anyone have a gun to you head or are they threatening with taking away your freedom? Of course not, but Government can and does.

  4. PJ
    April 5, 2010 at 22:36

    Good points. But if corporations control the government (which I believe they do), then corporations have all of the power of the government. We are witnessing corportions, by way of the government, forcing people to buy a product (health insurance). I think it’s just the beginning.

    • April 6, 2010 at 13:58

      Then the answer is to glow the growth of Government and stop them from being able to do what they want. If you fear big Corporations, you should fear Big Government even more, because only a Big Government (under control of an evil cabal of corporations or not) can force you to do something against your will.

  5. PJ
    April 5, 2010 at 22:49

    I have to correct myself. I think the beginning was when our government declared war on Iraq for the benefit of corporations.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: