You Say Communism, I Say the Ism That Made Me Rich

Denver Post columnist and friend o' Reason David Harsanyi celebrated his Christmas Eve by publishing a little pushback to the bizarre, if popular, meme that the economic crisis we're experiencing now repudiates the entire case for laissez-faire capitalism.

Celebrated progressive doyenne Arianna Huffington recently penned a brilliantly absurd piece titled "Laissez-Faire Capitalism Should Be as Dead as Soviet Communism."

Huffington argues, in effect, that communism and "laissez-faire" (minimal intervention) capitalism are equivalent ideological extremes.

Sure, one of these philosophies spurred the murder and misery of hundreds of millions worldwide; the other promotes liberty and innovation and welcomes foreigners to lounge around in expansive mansions paid for by their former oil-baron husbands.

So, we can agree, there is no such thing as a flawless ideology.

For you dartboard enthusiasts out there, Huffington's column is here.

I dare not speak for Planet Laissez-Faire, but one thing about the Huffington/lefty critique that baffles me (I mean, aside from the Veronique De Rugy-uncovered and Harsanyi-quoted fact that George W. Bush was much more of a regulator than Bill J. Clinton), is that it presumes/pretends that all enthusiasts of capitalism prefer no rules at all in the functioning of markets.

Take former Securities and Exchange Commissioner Paul Atkins, who Nick Gillespie and I interviewed earlier this month. Though derided by Business Week as some kind of crazy-libertarian "Dr. No," hell-bent on blocking every key "reform," Atkins has actually spent years backing the creation of a clearinghouse to count up and value over-the-counter trades of such instruments as credit default swaps. It was five years ago, and not last week, that Reason published a piece on derivatives advocating more stringent regulation on their use by Fannie Mae and Freddie Mac. As our anarchist readers will happily complain to you, these are rules, not a free-for-all. Those of us who aren't quite ready to abolish the state tend to be in favor of a more limited, and much more smart, set of clear rules that are based largely on transparency, cost-benefit-analysis, and fairness (i.e., so that the system can't be gamed to favor certain large investment banks or quasi-governmental entities that lard the politial system with campaign contributions).

We have been examining the effect of rules (and lack thereof) on the financial markets since long before the crisis was upon us; here's a more recent piece on the subject by Katherine Mangu-Ward from our January issue. But it appears that many of those commentators who, broadly speaking, were on the side that won the election in November are much less interested in talking tangibly about smarter rules than they are in pulling the camera way back, mis-describing what little they see, and prematurely eulogizing a philosophy whose scattered application has liberated more human beings than a thousand FDRs. It's genuinely curious.