Very enjoyable and coherent piece! I like the framing of arguments against central planning as arguments on the capability of a central organization to have the requisite knowledge. I'm experiencing that in the workplace in fact.
Thanks for your sensible essay. One thing often ignored by Republicans (and perhaps especially by hard-core libertarians) is that some level of "welfare" is necessary and proper, unless we are prepared to let abandoned babies, orphans, the profoundly intellectually disabled, and the severely mentally ill simply die. This has been realized like forever. In 17th century pre-revolutionary England, the biggest chunk of public expenditure was on widows & orphans.
Agree. I don’t want to live in a society where we do 0 redistribution. But I want to do that redistribution as efficiently as possible (more cash transfers less services) and think we can only have a productive discussion about what the right level of redistribution is if we acknowledge the trade offs.
Good article! IMO the problem is that we're viewing political orientation as a binary with the two poles moving along one dimension. There's a famous political compass quiz out there that shows where you land among two dimensions, but IMO that's limited too. I think there are really three things going on: 1) Organization (separation of powers, etc) 2) Economics (tax rate, budgeting, redistribution, tariffs) 3) Culture (immigration, LGBTQ issues, religion, drugs, guns, animal welfare, foreign policy). If we could actually talk about the issues rather than seeing it as like a Yankees vs Mets or cats vs dogs dichotomy, we might actually get something accomplished. MAGA has nothing more to do with the conservatism of Burke than Mao has to do with the liberalism of Locke/Rousseau.
Laissez-faire capitalism has never existed in perfect form. Historical examples like the Dutch Republic, early America, 19th-century Britain, and Hong Kong show that when trade is mostly voluntary, property is respected, and money is stable, prosperity, innovation, and investment flourish. The fact that perfect laissez-faire hasn’t existed only shows how much politics has gotten in the way, not that free markets can’t work.
Every attempt at socialism—Soviet Russia, Maoist China, Venezuela and the like—has proven disastrous: coercion inevitably produces waste, scarcity, and the unchecked accumulation of political power and widespread suffering for the population.
The author you respond to doesn’t write about politics or society, she writes diary-autobiography-fanfic about a narrow British semi-upper-bourgeois social milieu which haunts her because it’s high enough that she yearns to reach escape velocity into it, but low enough that it feels attainable.
These people are rich enough to have gone to a nice private boarding school, but not rich enough to insulate themselves from a socialist government with Skadden lawyers and offshore trusts. That’s why these guys “socially humiliate leftists”. I’m hazarding that Stella wants to either marry into this caste (and then just do socialism as a bratty little game), or have her milieu elevated to the same status as theirs. That’s pretty much her entire racket.
Socialism, fascism, and our current crony state corporatist system, all share the same underlying structure: in each, a small ruling group uses centralized authority to control the economy and dictate outcomes. Resources, production, and opportunities are allocated by political power rather than voluntary choice.
True laissez-faire capitalism is decentralized and voluntary: individuals own property, make independent voluntary choices, and coordinate through exchange. In a genuine capitalist system with honest money, incentives align with productivity and innovation, allowing prosperity to emerge from cooperation.
Any government attempt to “correct” inequality or redistribute wealth cannot replicate the coordination achieved by voluntary exchange. It inevitably produces unintended consequences, reduces prosperity, and replaces individual freedom with coercion.
Laissez-faire capitalism has never really existed. Some historical examples came close - the Dutch Republic, early America, 19th-century Britain, and Hong Kong - showing that when trade is mostly voluntary, property is respected, and money is stable, prosperity, innovation, and investment flourish.
The fact that perfect laissez-faire hasn’t existed only shows how much politics has gotten in the way, not that free markets can’t work.
Every attempt at socialism—Soviet Russia, Maoist China, Venezuela and similar regimes—has proven disastrous: coercion inevitably creates waste, scarcity, concentrated political power, and widespread suffering for the population.
Of course. I agree the free market for all its flaws is the best way to go. My point was more that too many free market advocates are pursuing a ‘free market Utopia’ rather than having a pragmatic understanding of how markets actually work. This was especially true in the Regan- Thatcher (sometimes called the Neo-liberal era). They advocated free markets in theory, but in practice the state (of the US and UK and many other countries) is bigger now that it ever was, and what you end up with is gigantic cooperations ruling (in cooperation with large governments).
If you want the kind of decentralised voluntary capitalism you've described, you need a workable accompanying political structure (Decentralised democracy?- the US was originally had a Federal system after all). Politics will always get in the way you’re right, so you need a political structure that gets in the way in the right ways but not the wrong ways.
Capitalism will always succeed over socialism because it allows you to get lucky (even if your chance of getting lucky is small). Socialism allows little or no opportunity for social/economic advancement. People who go on about inequality miss the point entirely. The thing to look at is dynamic mobility- how often does the composition of the rich in society change? As long as there is mobility there’s an opportunity for those at the bottom to rise to the top.
I’ll push your argument further. In my experience, socialism attracts’ power hungry losers’ people who desperately want power but don’t have the balls (or intelligence) to succeed on the free market and thus try to design a perfect system where their own shortcomings don’t matter. (As the tone of this answer suggests I have quite a bit of negative experience with such people). People who are greedy for money are far less dangerous than people greedy for status/credentials
Central planning like in the USSR was crazy. Basically having no markets at all or just black markets was insane. But state owned enterprises can work. And they often did work to some extent. It has however its own unique problems. I just think one should not mix both things together.
1. There are *lots* of places in America where identifying as a socialist will at least get you weird looks. Go to pretty much any suburb in a purple or red state and you will get weird looks or even mocked for identifying as a leftist. Even within the media, many of the most popular podcasters and YouTubers are right, or at least not left-coded. And of course, one of the most important social media platforms, Twitter, is owned by a very right-wing person who is doing everything he can to shift the culture of it to the right.
2. Hayek is right about central planning, but all of the most successful economies in the world are mixed economies with significant government intervention and regulation of the market. Most "socialists" in the US are really social democrats advocating for a mixed economy with more government intervention, not central planning.
The logic of central planning extends to things not called "planning." Regulations that homogenize business operations in a particular way is a kind of central planning. But yes it's not setting prices for all goods and services from D.C. ala "command and control."
Very enjoyable and coherent piece! I like the framing of arguments against central planning as arguments on the capability of a central organization to have the requisite knowledge. I'm experiencing that in the workplace in fact.
Thanks for your sensible essay. One thing often ignored by Republicans (and perhaps especially by hard-core libertarians) is that some level of "welfare" is necessary and proper, unless we are prepared to let abandoned babies, orphans, the profoundly intellectually disabled, and the severely mentally ill simply die. This has been realized like forever. In 17th century pre-revolutionary England, the biggest chunk of public expenditure was on widows & orphans.
Agree. I don’t want to live in a society where we do 0 redistribution. But I want to do that redistribution as efficiently as possible (more cash transfers less services) and think we can only have a productive discussion about what the right level of redistribution is if we acknowledge the trade offs.
Agree completely.
Good article! IMO the problem is that we're viewing political orientation as a binary with the two poles moving along one dimension. There's a famous political compass quiz out there that shows where you land among two dimensions, but IMO that's limited too. I think there are really three things going on: 1) Organization (separation of powers, etc) 2) Economics (tax rate, budgeting, redistribution, tariffs) 3) Culture (immigration, LGBTQ issues, religion, drugs, guns, animal welfare, foreign policy). If we could actually talk about the issues rather than seeing it as like a Yankees vs Mets or cats vs dogs dichotomy, we might actually get something accomplished. MAGA has nothing more to do with the conservatism of Burke than Mao has to do with the liberalism of Locke/Rousseau.
It's nice to see you back :)
Laissez-faire capitalism has never existed in perfect form. Historical examples like the Dutch Republic, early America, 19th-century Britain, and Hong Kong show that when trade is mostly voluntary, property is respected, and money is stable, prosperity, innovation, and investment flourish. The fact that perfect laissez-faire hasn’t existed only shows how much politics has gotten in the way, not that free markets can’t work.
Every attempt at socialism—Soviet Russia, Maoist China, Venezuela and the like—has proven disastrous: coercion inevitably produces waste, scarcity, and the unchecked accumulation of political power and widespread suffering for the population.
The author you respond to doesn’t write about politics or society, she writes diary-autobiography-fanfic about a narrow British semi-upper-bourgeois social milieu which haunts her because it’s high enough that she yearns to reach escape velocity into it, but low enough that it feels attainable.
These people are rich enough to have gone to a nice private boarding school, but not rich enough to insulate themselves from a socialist government with Skadden lawyers and offshore trusts. That’s why these guys “socially humiliate leftists”. I’m hazarding that Stella wants to either marry into this caste (and then just do socialism as a bratty little game), or have her milieu elevated to the same status as theirs. That’s pretty much her entire racket.
Socialism, fascism, and our current crony state corporatist system, all share the same underlying structure: in each, a small ruling group uses centralized authority to control the economy and dictate outcomes. Resources, production, and opportunities are allocated by political power rather than voluntary choice.
True laissez-faire capitalism is decentralized and voluntary: individuals own property, make independent voluntary choices, and coordinate through exchange. In a genuine capitalist system with honest money, incentives align with productivity and innovation, allowing prosperity to emerge from cooperation.
Any government attempt to “correct” inequality or redistribute wealth cannot replicate the coordination achieved by voluntary exchange. It inevitably produces unintended consequences, reduces prosperity, and replaces individual freedom with coercion.
Otherwise you’re left with the ‘but we haven’t had true socialism/capitalism’ argument
Laissez-faire capitalism has never really existed. Some historical examples came close - the Dutch Republic, early America, 19th-century Britain, and Hong Kong - showing that when trade is mostly voluntary, property is respected, and money is stable, prosperity, innovation, and investment flourish.
The fact that perfect laissez-faire hasn’t existed only shows how much politics has gotten in the way, not that free markets can’t work.
Every attempt at socialism—Soviet Russia, Maoist China, Venezuela and similar regimes—has proven disastrous: coercion inevitably creates waste, scarcity, concentrated political power, and widespread suffering for the population.
Of course. I agree the free market for all its flaws is the best way to go. My point was more that too many free market advocates are pursuing a ‘free market Utopia’ rather than having a pragmatic understanding of how markets actually work. This was especially true in the Regan- Thatcher (sometimes called the Neo-liberal era). They advocated free markets in theory, but in practice the state (of the US and UK and many other countries) is bigger now that it ever was, and what you end up with is gigantic cooperations ruling (in cooperation with large governments).
If you want the kind of decentralised voluntary capitalism you've described, you need a workable accompanying political structure (Decentralised democracy?- the US was originally had a Federal system after all). Politics will always get in the way you’re right, so you need a political structure that gets in the way in the right ways but not the wrong ways.
Can you name any society where ‘True laissez-faire’ capitalism’ actually exists/existed?
Capitalism will always succeed over socialism because it allows you to get lucky (even if your chance of getting lucky is small). Socialism allows little or no opportunity for social/economic advancement. People who go on about inequality miss the point entirely. The thing to look at is dynamic mobility- how often does the composition of the rich in society change? As long as there is mobility there’s an opportunity for those at the bottom to rise to the top.
I’ll push your argument further. In my experience, socialism attracts’ power hungry losers’ people who desperately want power but don’t have the balls (or intelligence) to succeed on the free market and thus try to design a perfect system where their own shortcomings don’t matter. (As the tone of this answer suggests I have quite a bit of negative experience with such people). People who are greedy for money are far less dangerous than people greedy for status/credentials
Central planning like in the USSR was crazy. Basically having no markets at all or just black markets was insane. But state owned enterprises can work. And they often did work to some extent. It has however its own unique problems. I just think one should not mix both things together.
A couple of quibbles:
1. There are *lots* of places in America where identifying as a socialist will at least get you weird looks. Go to pretty much any suburb in a purple or red state and you will get weird looks or even mocked for identifying as a leftist. Even within the media, many of the most popular podcasters and YouTubers are right, or at least not left-coded. And of course, one of the most important social media platforms, Twitter, is owned by a very right-wing person who is doing everything he can to shift the culture of it to the right.
2. Hayek is right about central planning, but all of the most successful economies in the world are mixed economies with significant government intervention and regulation of the market. Most "socialists" in the US are really social democrats advocating for a mixed economy with more government intervention, not central planning.
The logic of central planning extends to things not called "planning." Regulations that homogenize business operations in a particular way is a kind of central planning. But yes it's not setting prices for all goods and services from D.C. ala "command and control."
Capitalism is also for losers and degenerates.
I’ll take people who are greedy for money over people who are greedy for status/credentials any day…
Those desires are synonymous.
lol. there's no winning I guess.