Historian Richard Abrams on Ideology, Recession, and Policy Paralysis

Here's Abrams, Professor Emeritus, History, UC Berkeley:

Every time I see or hear the phrase “free market,” I have mixed feelings – a mix of anger and exasperation.  Why?  Because there is no such thing as a “free market;” there has never been any such thing, and never will be.  What’s more: it is hard to believe that those otherwise intelligent people who prattle about “the free market” don’t know that.  So it is easy to conclude that those who do use the phrase are simply monumental cynics or are suffering from an acute case of cognitive dissonance.

Here's me: Or they have much to gain personally and politically by perpetuating the myth?

Read it here.

Thanks to Linda Beale at ataxingmatter.

Addendum: BTW, I wouldn't go so far as to say "there's no such thing as a "free market;" there has never been any such thing, and never will be." What I would go so far as to say is that "free market" is used way too much in contexts where markets have clearly failed, which leads to confusion among media types and to sustained ideological distortions among the electorate. The confusion and distortions have negative consequences for us all.

Comments

[Coises]

The linked article by Richard Abrams was quite clear and interesting. Thank you.

There are at least three meanings of the phrase “free market”:

• an economic model of market behavior which can be subjected to analysis, the conclusions of which can be used — to the extent that the model is apt — to predict the behavior of real markets;

• a market in which prices and production develop primarily as the net result of individual decisions rather than being determined by a political process;

• a laissez-faire market, in which government does not atypically constrain the actions of buyers or sellers nor attempt to manipulate their choices through subsidies, tariffs, special taxes, tax exemptions or other means.

Unsurprisingly, when a term with emotional resonance (which almost any phrase including the word “free” has in the United States) has multiple meanings, people shift between one meaning and another during the course of debate, often with no idea that they (and those whom they debate) are doing so.

Abrams’ observation that “there is no such thing as a ‘free market’” almost certainly means that there is no real market that is described with complete accuracy by the “free market” economic model — an obvious and uninteresting statement. Of more interest — and probably still unanswered — is the question, “Under what, if any, conditions which might actually present themselves is a real market described well enough by the ‘free market’ model that the model will be useful for practical analysis and prediction?”

In engineering, one sometimes constrains the design of a product not because it is known that other designs cannot work, but because the constraint makes it possible to analyze the design by known and computationally feasible methods. For similar reasons, it is possible that if we can determine that the free market model is applicable under certain conditions, we might choose to bring about those conditions simply because economists could then better predict the course of events.

[K Ackermann]

It's not even a phrase anymore - it's a chant for those who don't care to think very much.

It's the same with energy independence: important people tell us that we need to drill everywhere in the US because it will lower our dependence on foreign oil.

The last I checked, there was only one price for oil, and that was spot price. If you drive around looking for a gas station that sells gas made from American oil, you'll run out of gas because they don't exist.

Colin Powell held up a vial of air and asked us to "imagine it contained..." and nobody caught the use of the word imagine. I lost my voice screaming that it was a trick, and that it only contained air.

We have a deep thirst for fear and slogans; two things that have no dependence on truth.