The existence of some facets of the financial system that were not controlled by the state hardly implies that more state control would have stopped the current crisis. Nor does it imply that less state control would have stopped it. However, I have yet to hear a single new regulation that did not require 20/20 foresight that we could have pursued to avert the credit collapse that we have recently suffered.
Our economy is very mixed. Large portions of private money, semi-private money, and government money were sloshing about in the financial sector prior to the credit crisis. Blaming "libertarianism" or "government" for it is silly. Deeper analysis and more careful thought is needed in dissecting the lessons from recent events in the market. Causal links must be proposed and evaluated.
Also, I personally don't claim that libertarianism can only work in an unadulterated form. I think rather free markets work pretty damn well now, and that most of them would work better without tinkering from central planners. I don't think you could design an economic order without macroeconomic fluctuations, free or planned. I also don't think any regulator will be smart enough to design an optimal regulation scheme, or that one necessarily exists for a dynamic economy.
My personal opinion isn't interesting really. Neither is the author of this article's.
What is interesting is public opinion. That seems to have swung away from deregulation. It is (rightly or wrongly) being blamed for this. In many circles (more so outside The States, I think), non-intervention is tolerated because it works, supposedly. A lot of people have accepted that while it is unfair, unsavoury, & generally unpleasant, but it works. Now it doesn't always work.
I suppose you're right. However, public opinion has been largely formed by the opinions of the regulators. I have never known a regulator to want less power, so libertarians are fighting a lost cause. That's ok, we're used to it.
As far as the rest of the world goes, European economic courses focus on the evils of the market and Marxist models of class struggle, so they're pretty much a lost cause too.
public opinion has been largely formed by the opinions of the regulators. I have never known a regulator to want less power, so libertarians are fighting a lost cause.
I don't think that's fair. I think the public's opinion is being reflected from the sentiment in the public debate around the world. Politicians, central bankers, academics, big name investors, etc. The specifics of interventions (proposed laws for bailouts) have been supported by public figures usually on the libertarian side of the policy (eg Rupert Murdoch). It's true, they've still stuck to their respective positions: John McCain is still more of a libertarian then Obama, Hugo Chavez hasn't moved much, etc. Die hards are still dies hards. But, the whole debate has shifted left.
This is very likely to bring with it other changes. I complain about people looking at the political spectrum simplistically just like anyone else. Left on A shouldn't mean left on B. But in reality, these things seem to be associated.
Our economy is very mixed. Large portions of private money, semi-private money, and government money were sloshing about in the financial sector prior to the credit crisis. Blaming "libertarianism" or "government" for it is silly. Deeper analysis and more careful thought is needed in dissecting the lessons from recent events in the market. Causal links must be proposed and evaluated.
Also, I personally don't claim that libertarianism can only work in an unadulterated form. I think rather free markets work pretty damn well now, and that most of them would work better without tinkering from central planners. I don't think you could design an economic order without macroeconomic fluctuations, free or planned. I also don't think any regulator will be smart enough to design an optimal regulation scheme, or that one necessarily exists for a dynamic economy.