The lonesome death of libertarianism

The financial crisis has put me in the position of being both on the winning and the losing side. As a risk-hater I’m a winner. Nobody tells me I’m a fool for renting my apartment any more, which is nice. As someone who likes free trade and free markets, I am apparently a loser. So says pundits. They say libertarianism and “free market fundamentalism” has now been discredited. I’m far enough away from being a libertarian that I have a choice in whether I feel struck by this criticism. I don’t mind public responsibilities and safety nets on principle, I just doubt our ability to do it well. Sometimes we do, and that’s fine with me. My main disagreement with social democrats and socialists is that they’re often economic illiterates, and don’t consider the hidden costs of good intentions. I’m a pragmatic. So there’s a large gulf between me and an objectivist. But I’ll say three words on behalf of the “free market fundamentalists”: 1) They’re not in charge. 2) In a broader sense we’re all free market fundamentalists these days, even the Norwegian left. 3) What applies to the financial world does not necessarily apply to the rest of the economy. This last point goes both ways. That deregulation works in many markets does not mean it works in the financial market, which functions differently. Deregulation is not good in itself, and neither is regulation. Reality doesn’t listen to Theory. So let’s try not to overcompensate.

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