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Why the debate government-vs-freemarkets is absurd

August 11, 2009

We all know what government is. It’s those folks, up in the Congress, the legislators, who sell new rules to the highest bidder. Their goals are lofty, they’re well-intentioned. Their new rules may work or they may not, it’s quite impossible to know. One thing’s for sure, each one of their actions puts in motion a myriad of unwanted or unplanned consequences. Yet in the final analysis, we’re talking about a few thousand people who try to affect the world through schemes, plans, designs, concerted efforts, etc…

On the other hand, what is the market? An emergent, evolving, spontaneous, web of voluntary exchanges, blah blah blah….A societal complex phenomenon with no one in charge (sic!?) which evolves through complicated feedback loops, choices, adaptations, competition, etc…That’s pretty nebulous. What are the market’s goals? If house prices fall, sellers are sad, but buyers are happy. Has there been a failure of some kind? And since no one designed the market, whose expectations are being frustrated? It’s not clear.

With these preliminaries out of the way, how can one possibly try to compare government to markets? The two concepts belong to different classes of abstraction. It would be like comparing a molecule of H2O with a river. Indulging is such debates is bound to distort the basic nature of both government and  markets.  All of a sudden you hear people talk about markets as if they could be set up by politicians, ex-novo, out of the blue! Just write some words down on paper and get the Prez signature and voila’! Or talk about governments as if they could singlehandedly spur progress and feed entire populations.

If a debate promotes false representations of reality, then maybe it’s better to ditch it altogether.

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