{"id":36390,"date":"2018-09-14T01:00:53","date_gmt":"2018-09-14T05:00:53","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=36390"},"modified":"2018-08-24T08:44:57","modified_gmt":"2018-08-24T12:44:57","slug":"qotd-free-market-capitalism","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2018\/09\/14\/qotd-free-market-capitalism\/","title":{"rendered":"QotD: Free market capitalism"},"content":{"rendered":"

What is<\/em> free-market capitalism? Allan Meltzer, an economist at Carnegie Mellon, a Hoover Institution scholar, and onetime advisor to President Ronald Reagan, offers a classic definition. \u201cAs long as you engage in actions where your actions don\u2019t impinge upon other people, you\u2019re free to buy and sell anything you want,\u201d he says, adding that free-market capitalism protects private property. Thomas Coleman, a hedge-fund veteran heading up an economic-policy shop at the University of Chicago, adds another key element: free-market capitalism functions best when people and companies can trade \u201cwithout systemic distortion of prices.\u201d Deirdre McCloskey, until last year a professor at the University of Illinois, and author of the recent book Bourgeois Equality<\/em>, says, \u201cI don\u2019t like calling it capitalism, anyway, which was a word invented by our enemies. … I call it instead market-tested betterment, innov-ism. … That\u2019s what\u2019s made us rich.\u201d McCloskey says that the heart of \u201cbetterment\u201d is Adam Smith\u2019s ideal of \u201cevery man to pursue his own interest in his own way\u201d \u2014 and that \u201cdoesn\u2019t mean a large government sector,\u201d she emphasizes.<\/p>\n

Free-market capitalism isn\u2019t the same thing as radical libertarianism. Stan Veuger, an American Enterprise Institute scholar and economics lecturer at Harvard, dismisses what he calls \u201cthe anarcho-capitalist ideal\u201d: an economy with no regulations and zero taxation. \u201cThere are places like Somalia that score well\u201d on such purist definitions of free markets, he points out. To work well, capitalism needs \u201can environment where people can concentrate on being productive,\u201d rather than, say, having private armies to assure personal safety. Free-market capitalism requires laws and rules, more than ever, now that more people live in close proximity in dense cities than ever before. Human activity leads to disputes, and disputes can be solved, or at least moderated, by resolutions that govern behavior. We often forget that markets don\u2019t make broad public-policy decisions; governments do. Markets allocate resources under a particular policy regime, and they can provide feedback on whether policies are working. If a city, say, restricts building height to preserve sunlight in a public park, free-market actors will take the restricted supply into account, raising building prices. This doesn\u2019t mean that the city made the wrong decision; it means that the city\u2019s voters will risk higher housing prices in order to preserve access to sunlight. By contrast, a city that restricts housing supply and restricts prices via rent regulation is thwarting market signals \u2014 it takes an action and then suppresses the direct consequences of that action.<\/p>\n

Nicole Gelinas, “Fake Capitalism: It\u2019s not free markets that have failed us but government distortion of them”, City Journal<\/em><\/a>, 2016-11-06.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

What is free-market capitalism? Allan Meltzer, an economist at Carnegie Mellon, a Hoover Institution scholar, and onetime advisor to President Ronald Reagan, offers a classic definition. \u201cAs long as you engage in actions where your actions don\u2019t impinge upon other people, you\u2019re free to buy and sell anything you want,\u201d he says, adding that free-market […]<\/p>\n","protected":false},"author":1,"featured_media":35193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25,10,53,41],"tags":[1080,320,550],"class_list":["post-36390","post","type-post","status-publish","format-standard","hentry","category-economics","category-liberty","category-politics","category-quotations","tag-adamsmith","tag-freetrade","tag-libertarianism"],"jetpack_featured_media_url":"https:\/\/quotulatiousness.ca\/blog\/wp-content\/uploads\/2016\/06\/favicon.png","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-9sW","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/36390","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=36390"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/36390\/revisions"}],"predecessor-version":[{"id":36391,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/36390\/revisions\/36391"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media\/35193"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=36390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=36390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=36390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}