Slate's Matt Yglesias furnishes the latest example of “vulgar liberalism,” as Kevin Carson calls it. This is the attribution of the evils of corporatism—big-business power, recessions, long-term structural unemployment, exploitation of labor, and more—to its antithesis, the freed market. Keynesians look around, see unemployment and idle resources, and conclude (often encouraged by libertarians) that since the “free market” let this happen and doesn’t seem to be doing anything about it, government stimulus is in order.
That’s like walking into a movie in the middle, thinking you understand the plot. There are certainly idle labor and idle resources today. But that mere observation says nothing about why they are idle. Ludwig von Mises and F. A. Hayek, bolstered by the anatomists of corporatism, provided an explanation. Critics are welcome to rebut it, writes Sheldon Richman, but they shouldn’t pretend it doesn’t exist.