Farewell, Free Marketeers (1989)

From the December 1989 issue of the Socialist Standard

To defend Marx against criticism is not to be taken as implying endorsement of everything he said and wrote. The man himself continually updated and corrected his theories. Who are we to foist omniscience upon him? But there are those who behave as if his was the final word upon capitalism, and past history, and the future. One can imagine his scathing reaction to any such flattery. His ruthless abandonment of the beginning and the end of the Communist Manifesto, of the reformism in his earlier proposals in favour of the abolition of the wages system, and of his tidy schema of social evolution so as to accommodate the Asiatic mode of production, these and other changes of direction demonstrate that humility which is the beginning of wisdom.

Feeble Grip on Logic

Marx may well have been the pathologically quarrelsome old sponger that Arthur Koestier claimed. He may have loved his mother and been kind to little dogs. We can leave those concerns to the propagandists of the status quo: the Von Mises and Hayeks and Friedmans and Poppers and Nozicks of this world, who all share a feeble grip on the Logic of Aristotle.

Von Mises charges the critics of capitalism with being merely intellectuals who are jealous of the businessmen's wealth. This used to be called the fallacy of argumentum ad hominen. It was illustrated by the case of a Counsel who returned a hopeless brief to his junior with the advice: No case. Abuse the plaintiffs attorney! And this is the final word of a man who pleads for his economics to be regarded as a science.

His pupil Hayek is an equal master of logic:

It is money which in existing society opens an astounding range of choice to the poor man.

and

Some voluntary (sic) labour service on military lines might well be the best form for the state to provide the certainty of an opportunity for work and a minimum income for all.

He later repeats the argument in favour of forced labour, where unions resist wage cuts after a war, and all this in a polemic against an unbelievably muddled notion of socialism, called The Road to Serfdom.

Metaphysical Predictions

Hayek's colleague Karl Popper provides the explanation of how the system will benefit us all. It is because of the unintended consequences of all our individual actions which in some mysterious way combine to do good. Popper insists that all theories which cannot be falsified by experience are metaphysical. A. J. Ayer pointed out that this would make a statement “there are white swans” a metaphysical proposition as what experience could show it to be false?

It is equally difficult to see how Popper's own theory could be falsified. Perhaps Ayer saved Popper from the consequences of his own foolishness. He could not save him from the silly argument that all wide-ranging, long-term predictions are metaphysical. Popper should go and tell that to the insurance companies. It was, of course, the rationale for an attack on Marx's view of the future, which was not scientific prediction, he says, but metaphysical prophecy. I predict, you prophesy, he reads tea-cups.

Popper began by pleading for “piecemeal social engineering" as an alternative to wholesale social change. We can sympathise with his emotions when we consider that the book which gave him notoriety, The Open Society and Its Enemies, was written during the Second World War, with the horrors of Stalinism and Hitlerism on everybody's mind, and Popper himself a refugee. With the growing disenchantment of the establishment with any kind of social engineering after the failure of the Heath government, however, he adopted a more Panglossian view, and decided against change, piecemeal or otherwise.

Joining the Game in the Middle

Nozick in Anarchy, State and Utopia, argues for maintaining the status quo but with minimum interference by the state. He lays great store by the right of private property, but he joins the game in the middle and does not seem to be aware that the game was started by a great act of violent dispossession backed by the state. His position is therefore one of ignorance or lack of scruple.

Friedman is another who argues that we only act from selfish motives but that the unintended consequences of our actions are that everybody benefits, that Adam Smith's “invisible hand” sees that we are all alright. Many people in 19th century Britain and 20th century wherever might be puzzled by this claim. In any case, Friedman casts doubt on his fidelity to this belief when he says that it does not apply to academics. They act, apparently, just to secure the approval of their fellows. Whether this unselfishness deprives us all of benefits, he doesn't say.

Booed off the Stage

It was the collapse of credibility in the Keynesian and Fabian consensus that brought these propagandists of the Free-Market to the front of the stage in the 1970s. They had been waiting a long time, ever since the 1930s. The Great Crash had destroyed the plausibility of the argument: the US until 1929 was about as free an economy as was ever likely to arise in a real world, and it produced catastrophe, needing a long time to forget. The reaction was state-intervention everywhere. The most complete Keynesian of them all was probably Adolph Hitler.

With the intellectual trashing of these interventionists by the increasing economic crises —stop-go, stagflation— as the Second World War receded, the scene was set once more for the Free Market to be offered up as the solution to all our ills. And what better place to try it out than Britain? As Galbraith pointed out, there was no excuse if it failed. A sober, almost phlegmatic population, almost designed for the “we can take it" role.

The innings has been a short one, a mere decade. This might well turn out to be the excuse the next time round. It recalls the Irish nonagenarian keening over the death of her seventy-five year old son: "I didn't have time to raise him. I didn't have time to raise him."

Any time now the roof of the world economy could fall in, though only a fool would put a date to it. The otherwise prescient City tipster Bob Beckman sold his house in Regents Park in 1983 anticipating the crash and missed the greatest rise in property values in history. The Free-Market act is going to dance off the stage to the boos of its erstwhile supporters. But what is next on the bill? Are memories so short?

Ken Smith