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Market economics, fundamentalism and Australia’s ‘free-market club’
Gerard Jackson
Anti-market activists contrive to smear market economics by using the terms “market fundamentalism” and “economic fundamentalist”. The term “fundamentalist” is clearly designed to convey the impression that market economics is nothing more than a “quasi-religious” or “ideological” mode of thought masquerading as a respectable discipline.
Any reasonably intelligent person understands that the best way of exposing an intellectual fraud is to use logic to directly challenge its assumptions and conclusions. But our anti-market critics refuse to do that. Like every ideologue and vested interest before them they have resorted to the tactics of smearing the discipline and misrepresenting and abusing its advocates. Incredible as it may seem, these tactics seem to have successfully polluted the reasoning of certain members of what is disparagingly called in Melbourne the FMC or Free Market Club.
An example of this can be found in A Defence of Economic Rationalism (Allen & Unwin, Australia 1993), a collection of essays criticising market opponents. In his contribution John Stone agreed with market critic and economic illiterate Donald Horne who asserted that “Economic fundamentalists — unlike ordinary economists — confuse the idea of market (and competition) with the idea of laisssez-faire policy . . . .”
Stone then averred that this was one reason why “economic fundamentalist views have not carried any significant weight within the great body of mainstream economic thought” for as long as he can remember. (And this is from a man who prides himself on his intellect. Unfortunately things have deteriorated further since Stone made this ridiculous statement).
The reader will note that neither Horne or Stone made any attempt to tell us what they meant by “fundamentalist economists”. Dictionaries will tell you that fundamental means basic, roots foundations, etc, where as fundamentalist refers to a religious movement that teaches the infallibility of the Bible. Obviously, calling some economists fundamentalists is meant to suggest incompetence or irrelevance.
But would Stone or Horne call a physicist a fundamentalist because he defended basic scientific laws? Would he call a mathematician a fundamentalist or even dogmatic because he emphatically stated that two plus two always equals four? Surely not. Yet their abuse of those they call “economic fundamentalists”, apart from its Orwellian ring, comes down to this absurd level.
An “economic fundamentalist” can only mean an economist who sticks to fundamental economic laws just as physicists adhere to fundamental physical laws. Would Stone or any other member of the FMC attack an economist for defending the law of comparative advantage or the law of diminishing marginal utility? No. The silly claim that fundamentalists “confuse the idea of market (and competition) with the idea of laisssez-faire policy” is the kind of nonsense one expects from economic illiterates like Horne — but Stone!
Laissez-faire polices are free market policies. All that laissez-faire basically means is that markets should be free and property rights respected. It should be clear that the pursuit of free markets inexorably leads to laissez faire policies. That Stone and other members of the FMC are unable to see this should defy belief until we realise that this is the same man who has never been able to fully break free of his Keynesian shackles.
Stone and those like him have obviously succumbed to the statist propaganda that slandered laissez faire as a selfish and inhuman doctrine that let the poor starve and cast widows and orphans onto the streets. Unfortunately it is this vicious caricature that has come to dominate the popular imagination, feeding anti-market sentiments in the process.
Gerard Jackson is Brookes’ economics editor
BrookesNews.Com
Monday 12 February 2006