Friday, September 19, 2008

Free Market Dude in Ben Bernanke's world

Will Wilkinson blogs on the trouble with being a free market guy in Fed Commissioner Ben Bernanke's world.

But would we be better off without Bernanke’s job? I sincerely don’t know. I am torn about the strong version of the Austrian story. I think they might be right that none of this would have happened had there been a free market in money, etc. But I half-suspect that we wouldn’t be able to sustain such complex, globally-integrated financial markets in the absence of a relatively active government regulatory role. That is, we might not be as rich as we are now had we been living in a world of financial laissez faire. And if, as I half-suspect, I am wrong about that, I wonder how relevant it is. I very generously put the probability of the abolition of the Fed in the next twenty years at .10. If my dreams of awesome intellectual influence were suddenly realized, my advocacy of its abolition I think moves the probability of it to about .20. But there are other hopeless crusades that matter rather more to me. I leave this one to Ron Paul.

So what can I really be for in the present circumstances. Merely that the Fed do better. That ice catch fire and the Fed disappear? I guess there’s no reason I can’t be for both.

Wilkinson's post on the impossibility of blaming purely government or market forces because of the "byzantine amalgam of market and state institutions enmeshed in a thicket of regulation" is also worth a quick read.


Post a Comment

<< Home