Even as the season is entering its final few months (and for many, final few weeks), it is still possible to uncover excellent sources of evidence. While doing some TOC research, I came across a journal called Challenge: A Magazine of Economic Affairs that contains many very useful articles about this year’s topic. You’ll need access to MetaPress, but most university libraries seem to have subscriptions. If nothing else, it is a good source to add to your list of economics and public policy journals to check out every few months.
Below the fold is a free card from a recent issue of Challenge from noted communitarian Amitai Etzioni that provides a clear, persuasive response to the thesis of many “free market good” arguments.
Amitai ETZIONI, University Professor at The George Washington University, former Professor at Columbia University, Harvard University, and the University of California-Berkeley, former Senior Adviser to President Jimmy Carter, 2009
[“The Free Market Versus a Regulating Government,” Challenge, Volume 52, Issue 1, January/February, Available Online to Subscribing Institutions via MetaPress, p. 40-41]
To regulate or not to regulate—that is not a question. There never was a free market, and even if one could be constructed, nobody would want to live with it. Throughout all of modern economic history (a statement so sweeping that one can rarely make it with assurance, but which is proper in this case), government has set limits on the market. Before that, there were no markets in the sense in which we use this term. All that has changed are the degrees and kinds of regulations.
Markets have been excessively managed or undermanaged—poorly [end page 40] boxed in or broken out of their containers—but never truly boundless. Thus, the market in human beings (slavery) was, even in its worst days, limited to some races or classes of people, before it was outlawed completely. Private property was protected by law as early as the Roman empire. Markets had to close on Sundays or some other holy day and so on.
These days, nobody in his right mind would seek a market that allowed children to work down in the mines, factories to dump toxic waste into rivers from which cities draw their drinking water, or merchants to sell melamine-laced baby food. Even most free market devotees (an assortment of laissez-faire theorists and their political counterparts) surely would vote against a return to the days in which every individual bank in the United States was free to issue its own currency.
Regulations are not merely essential for ensuring that basic human needs are not wantonly denied by agents seeking to maximize their profits. They are also often sought out and promoted by businesses themselves, especially large ones. These businesses fear “cutthroat”—i.e., unregulated—competition. They are keen to see that their patent rights will be observed and to ensure that their trade secrets not be leaked to the competition. They favor zoning regulations to ensure that no one marketing the same product or service will open up shop right next door, among many other regulations. In short, regulation often serves to ensure the smooth operation of the market.
Ideologues have pretended for more than 200 years that there is a choice between free markets—and all the alleged blessings thereof—and big government, which “interferes” in the markets, curtails efficiency, and kills jobs. Actually, an honest argument would acknowledge that free markets exist only in some rather simplistic mathematical models favored by many economists—and maybe in Brooklyn bridges. An honest argument would be limited to questions of whether specific areas need more or less regulation, what kinds of regulation are most suitable, and how tightly they ought to be drawn.