Liberal-speak defies logic on capitalism

[Tigermike 3,425]

Liberal-speak defies logic on capitalism

Apr. 1, 2007 12:00 AM

As an economics professor for 30 years, I have emphasized free-market capitalism as the surest way to raise living standards for the masses. In the mid-'70s, economists were not of one voice on this issue. Economic conservatives, led by Friedman, Hayek and Prescott, were clearly influential. Yet economic liberals, led by Samuelson, Solow and Galbraith, pointed to the effectiveness of the Soviet Union's central planning and held up Sweden as the world's best economy. The extreme left even defended Castro. It appeared that this was an issue on which reasonable people could disagree.

This is no longer the case. The facts are in. The Soviet Union came apart economically at the seams in the early 1990s. Over the past six years, real Gross Domestic Product per capita, which was already higher in the U.S. than Sweden, has also grown faster in the U.S. And Castro is clearly a thug who has driven his people deeper into economic misery. How can anyone defend a leader who prevents people from migrating?

The vast majority of academic economists are now in agreement. What works best are free markets, free trade, well-defined private-property rights protected by just courts, low tax rates, sound money and non-corrupt governments. Examples abound from Hong Kong to Estonia to Ireland to Iceland. Laissez-faire capitalism does not exploit the masses; brutal governments do.

Yet liberal-arts faculty members continue to cling to their leftist beliefs. For the most part, I have ignored this crowd, even when a student said his woman-studies professor said she did not believe in the laws of demand and supply when it comes to faculty salaries.

But recently, two events led to this article. First, a student e-mailed asking why in his sociology course faculty members stressed mass exploitation under free-market capitalism when, in my class, such powerful evidence was presented to the contrary. Second, in an interview for a Truman Scholarship, an economics major who wanted to tackle slavery in the world, told a liberal-arts faculty member she wanted to look at the problem as an economist. The faculty member responded that she is much more caring than the typical economist. Incredible! Among the least-exploited individuals on Earth are university faculties. Yet some relish pandering to unsuspecting minds, crying victimization and pontificating that economists are basically cold-hearted fools.

Let's be crystal clear. A good heart is simply not enough to make the world a better place. To believe that free-market capitalism today exploits the masses is no different from arguing the Earth is flat.

So what can be done? One possibility is to fire these faculty members. I am totally opposed to this (even though I cannot imagine any geography professor being allowed to tell classes that the Earth is flat). A university is a haven for controversial ideas, and arguments from the far right to the far left are essential. Arizona State University has classes in fiction and fables in literature departments, so why not in other departments, as well?

For the same reason I completely reject the proposed legislation of state Sen. Thayer Verschoor, R-Mesa, to fine faculty members $500 for discussing highly charged social, political, cultural and military issues because students might be offended or hear only one side. A major purpose of a university education is to shake up people and expose them to unpleasant and unpopular ideas.

A third solution is to have the anti-capitalist crowd take economics courses on campus. However, I hold little hope here. Even if they did take classes, many would have no intention of actually changing their thinking on how capitalism and free markets work. As many of you know, among the most close-minded people in the U.S. are large numbers of "liberal" liberal-arts faculty members who immediately reject any opinion different from theirs.

Instead, my straightforward solution: Let there be truth in advertising. On the front of class syllabi at ASU, statements are written about student academic dishonesty. The same needs to be done for faculty members. I propose that all who are going to talk extensively about raising living standards must list the economic courses they have had along with their overall liberal or conservative bent on the front of their syllabi. And if they are going to stress mass exploitation under free-market capitalism, they must write that this is a highly personal view in complete contradiction to contemporary economic thinking and reliable data. Of course, some will scream about a reduction in academic freedom. Nothing could be further from the truth. How can honesty and transparency ever be a threat to academic freedom?

If ASU is to be the role model for the New American University, it's time to lead by example. Being economically bereft and supremely closed-minded is no way for reputable faculty members to go through life. Truth must trump ignorance even when this ignorance is well-intended.

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[otterinbham 0]

Completely unanswerable.

When I was a freshman in college, I read Free To Choose, and several other of Friedman's works, along with Hayek's.

Now, I was an English major at a liberal arts college, and I would offer up the viewpoints I had read, and begin punching notable holes in the opinions of my classmates and professors.

A pattern emerged. Namely, nobody could actually argue economics! I would wrestle them to the mat, and their only rebuttal was to call me a fascist (of which I am a complete philosophical opposite). No coherent discussion of facts or figures. Just annoyance that I had not kowtowed to the Keynsian wisdom of the day.

I talked to an old girlfriend not too long via e-mail. She is now a literature professor in Washington state and proudly describes herself as politically active, and "waging noble war against the greed of corporations." Yes, she actually wrote that.

I just didn't have the heart to argue with her sad, discredited world view. She sits tenured on faculty teaching the same classes year after year, without ever actually having to produce anything again. I suppose that's why she continues her flirtation with socialism...because the world she works in is about the only place where its principles actually thrive.

[quietfan 233]

Seems to me it's always a matter of moderation or degree.

Clearly total state control of the economy, as tried by the Marxists in the Soviet Union, doesn't work. On the other hand, we all accept some degree of socialism. I doubt any of us want to completely abandon all public education, public highways, child labor restrictions, or government safety protections for workers, yet all those might be considered as forms of socialism. Many European nations & Canada take socialism further, but their economies survive and their citizens seem happy with the results.

Without a doubt, communism doesn't work. But then, scandals such as Enron, Worldcom and the like (or the Robber Barons of the 1800's) certainly demonstrate that capitalism is not immune to exploitation of the masses for the benefit of the few. It's unrealistic to condemn or to accept all socialism or all capitalism as absolutes.

[otterinbham 0]

Seems to me it's always a matter of moderation or degree.

Clearly total state control of the economy, as tried by the Marxists in the Soviet Union, doesn't work. On the other hand, we all accept some degree of socialism. I doubt any of us want to completely abandon all public education, public highways, child labor restrictions, or government safety protections for workers, yet all those might be considered as forms of socialism. Many European nations & Canada take socialism further, but their economies survive and their citizens seem happy with the results.

Without a doubt, communism doesn't work. But then, scandals such as Enron, Worldcom and the like (or the Robber Barons of the 1800's) certainly demonstrate that capitalism is not immune to exploitation of the masses for the benefit of the few. It's unrealistic to condemn or to accept all socialism or all capitalism as absolutes.

Absolutely. No question. I'm no Social Darwinist, and neither was Milton Friedman. Nobody is contemplating a return to the worst excesses of the 19th Century. However, one of the key lessons of the late 70s and early 80s is that excessive regulation actually hurts consumers while not delivering any tangible benefits in terms of better products, better safety, or better prices. It was the law of unintended consequences run amok.

[DKW 86 7,726]

Love this thread. "Free to Chose" was the Reagan era bible and should be mandatory reading on every college campus. He wrote it in the late seventies? and has proven true since then.