This is my response to Mark Peters' original post, located
here. In it he mentions laissez faire, which immediately gets my hackles up--as is obvious from the series of posts which followed.

I'm not persuaded that true laissez faire, or its political manifestation, libertarianism, are good things. I've read enough to suspect any solution which is offered as universally applicable. This strikes me as far too simplistic. And libertarianism is essentially an unnuanced position which is offered as capable of solving all ills. I could go on here but the remainder of our exchanges should make my opinions on it fairly obvious.

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Mr Peters,
Your suggestion of a new basis for evaluating the political spectrum is interesting, but seems more useful as a philosophical theory than a basis for sound policy. I agree with you in broad principle, but pure laissez faire is not sound economic policy and would be damaging to the nation. If your reference to laissez faire was a figure of speech and not to be interpreted literally, then all the following (like much that I write!) is silly longwinded bunk and can be safely disregarded. BUT...

Individual rights were supreme to the Founding Fathers, but there has never been a suggestion that a civilized nation could allow individual rights unchecked indulgence. Our love and protection of individual rights are part of what makes us a great nation, but allowing the nation to self-destruct based on solely that principle does nothing to serve the original goal of promoting individual rights.

That was the whole point of our Constitution; the Bill of Rights, which we rightly revere, was something of an afterthought. America previously had operated under the Articles of Confederation, under which the nation was on the verge of splitting into thirteen independent, unrelated, soverign nation-states. The point being, that wishing to become a great nation by the intellectually consistent application of political precepts of liberty doesn't work if the nation itself doesn't survive and flourish as an entity.

So how is this relevant? Laissez faire is the only system of economics which is intellectually consistent with individual liberty. But the very nature of government in certain ways restricts individual liberty anyway, and certainly "the right to swing your arm stops at your neighbor's nose" is an old example of that. Liberty doesn't by itself allow a nation to become great if we're all running around whacking each other about the head, just to exercise our liberty to do so. And laissez faire has predatory
elements in it which amount to the very wealthiest among us economically whacking all of us about the head whenever they please, unchecked by any restraint. Pure laissez faire doesn't really work.

Adam Smith--which by now everyone probably realizes is my guiding authority on matters of economics, even above Alan Greenspan :)--already had pointed out that pure, unchecked laissez faire is a bad thing, as early as 1776. There should be no question that he thought free trade and commerce were Good Things:

>>The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security is so powerful a principle that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often incumbers its operations[.]<< (Book 4, Ch 5, Paragraph
82)

But monopolies, one ugly consequence of unchecked laissez faire, are uniformly bad, and it is proper to check their abuse. Smith mentions the adverse consequences of granting or allowing any sort of monopolies dozens of times in the book. Two quick examples:

>>If the tax had been considerable, it would have oppressed the small, and forced almost the whole retail trade into the hands of the great dealers. The competition of the former being taken away, the latter would have enjoyed a monopoly of the trade, and like all other monopolists would soon have combined to raise their profits much beyond what was necessary for the payment of the tax. The final payment, instead of falling upon the shopkeeper, would have fallen upon the consumer, with
a considerable overcharge to the profit of the shopkeeper. For these reasons the project of a tax upon shops was laid aside, and in the room of it was substituted the subsidy, 1759.<< (Book 5, Ch 2, Paragraph 103; emphasis mine)

And again:
>>By a perpetual monopoly, all the other subjects of the state are taxed very absurdly in two different ways: first, by the high price of goods, which, in the case of a free trade, they could buy much cheaper; and, secondly, by their total exclusion from a branch of business which it might be both convenient and profitable for many of them to carry on. It is for the most worthless of all purposes, too, that they are taxed in this manner. It is merely to enable the company to support the negligence, profusion, and malversation of their own servants, whose disorderly conduct seldom allows the dividend of the company to exceed the ordinary rate of profit in trades
which are altogether free, and very frequently makes it fall even a good deal short of that rate.<< (Book 5, Ch 1, Paragraph 119)

So the point of all this is that individual liberty is obviously economically important, and that the ability of everyone to make his own decisions based on his own interest serves the common good; but that unchecked capitalism becomes self-defeating when it is allowed to develop into a monopoly (which is a bad thing and should be prevented). And it's important to note that this is consistent with the apparent intent of the Federalists, who were pragmatic enough to temper their love of liberty with sufficient checks to ensure the US would flourish.

JKS.

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