Having inadvertently started this thing, I suppose I ought to say something. First, I don’t mind being called a libertarian, but I am a libertarian primarily because I am a conservative. Liberty is my heritage. I am not a Tory who regrets 1642, 1689 and 1776, but someone who celebrates them as great acheivements of our forefathers. (Far too many self-described conservatives these days on both sides of the Atlantic, it seems to me, fail to recognize the central importance of the struggle for liberty in our history.) That being said, I do think PJ made a mistake when he said the free market is “just” a measure. That was not the point my original post was trying to make. The point is that the free market, which I think amounts to one of the Permanent Things, cannot be fooled or tooled. As Malcolm Muggeridge said, God is not mocked. I make the point again in my article today, when I say that the housing market reacted to the signals of government in ways that government approved of, until the market showed them the end result. So we should defend the free market not because it always delivers perfect results. It won’t, not unless we have perfect people. Instead, we must defend it because it delivers information far better than a Philosopher King, a Politburo, or a Regulator.
Yet, as Jonah says, markets are more than this information delivery system. Where the Chicago School has gone wrong is in focusing purely on economic efficiency. As my boss Fred Smith said way back in 1983, “The Chicago School’s case for antitrust policy . . . rests solely on economic efficiency, as if rights had nothing to do with the matter — as if business had no right in principle to dispose of its property as it sees fit, but only a conditional freedom so long as it helps maximize some social utility function. That is to say, no business is entitled to its property if that property can be redeployed so as to expand output. With ‘conservative,’ ‘pro-business’ economists taking this view, who needs social democrats.” In other words, if we value property rights, the free market is an essential consequence. And that is why market socialism never works, because it devalues property rights. Liberty demands property rights which demand free markets. We only interfere with that chain in defiance of history.