As conservatives post their questions to this list they make the
presumption that any assertion not in line with free market ideology
must be defended. I. e. they presume that they are right and anyone
disagreeing must lay out, in detail, a defense of that disagreement.
Quite arrogant, isn't it?
Keynes aswered this in the 1920s, speaking of free market competition in
an industry like electric power:
"The beauty and the simplicity of such a theory are so great that it is
easy to forget that it follows not from the actual facts, but from an
incomplete hypothesis introduced for the sake of simplicity. Apart from
other objections to be mentioned later, the conclusion that individuals
acting independently for their own advantage will produce the greatest
aggregate of wealth, depends on a variety of unreal assumptions to the
effect that the processes of production and consumption are in no way
organic, that there exists a sufficient foreknowledge of conditions and
requirements, and that there are adequate opportunities of obtaining
this foreknowledge. For economists generally reserve for a later stage
of their arguments the complications which arise -- (1) when the
efficient units of production are large relatively to the units of
consumption, (2) when overhead costs or joint costs are present, (3)
when internal economies tend to the aggregation of production, (4) when
the time required for adjustments is long, (5) when ignorance prevails
over knowledge, and (6) when monopolies and combinations interfere with
equality in bargaining -- they reserve, that is to say, for a later
stage their analysis of the actual facts. Moreover, many of those who
recognise that the simplified hypothesis does not accurately correspond
to fact conclude nevertheless that it does represent what is 'natural'
and therefore ideal. They regard the simplified hypothesis as health,
and the further complications as disease."
J. M. Keynes, "The End of Laissez-faire" in The Collected
Writings of John Maynard Keynes, Vol. 9, Essays in Persuasion, London,
The Macmillan Press, 1972.
There is little evidence that the "free market" works as the CATO
Institute and the rest believe, yet the widely held presumption that it
does remains unassailable.
It makes you feel like Galilleo doesn't it?
Gene Coyle
