Free Markets, Free People


Observations: The QandO Podcast for 23 May 10

In this podcast, Bruce, Michael, and Dale discuss Rand Paul, this week’s elections, and the stock market.

The direct link to the podcast can be found here.


The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

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Misrepresenting Libertarianism

The editors of the New York Times misrepresent libertarianism by way of Rand Paul and his statements about the Civil Rights Act of 1964, saying:

As a longtime libertarian, he espouses the view that personal freedom should supersede all government intervention. Neighborhood associations should be allowed to discriminate on the basis of race, he has written, and private businesses ought to be able to refuse service to anyone they wish. Under this philosophy, the punishment for a lunch counter that refuses to seat black customers would be public shunning, not a court order.

It is a theory of liberty with roots in America’s creation, but the succeeding centuries have shown how ineffective it was in promoting a civil society. The freedom of a few people to discriminate meant generations of less freedom for large groups of others.

It was only government power that ended slavery and abolished Jim Crow, neither of which would have been eliminated by a purely free market. It was government that rescued the economy from the Depression and promoted safety and equality in the workplace.

Let’s start with the most obvious canard, which is the proposition that Jim Crow had anything to do with free markets. They were called “Jim Crow Laws“, not “Jim Crow Markets”, the obvious reason for which is that separate accommodations were mandated by state governments, not organically grown in some mythical garden of free association rights. Indeed, the entire reason for the corrupt deal behind the presidential election of 1876 was to throw the South’s support behind a president who would end Reconstruction.

It was government–in this case, the state governments in the South–that imposed Jim Crow, and government that forced private companies to impose the desired restrictions on blacks.  If government intervention was required to Jim Crow, that was only because governments had imposed it in the first place.  And it certainly wasn’t the free market that imposed racial segregation on federal government employment, or military service. Nor was it the free market that imposed poll taxes or literacy tests aimed at preventing blacks from voting in elections. The argument of the New York Times’ editors is essentially that because one level of government ended the racial segregation that another level of government imposed, this shows the superiority of government over the free market.

Now, this is not to say that the owner of a drug-store lunch counter would have served blacks.  Some most certainly would not.  But we’ll never know how long that state of affairs might have lasted, because the state governments of the South did everything in their power to ensure that it would last, until forced to do otherwise. And to argue that the free market would never have eliminated Jim Crow is to argue an unprovable negative.  What we do know, however, is that there are examples, such as bus companies refusing to make blacks sit in the back of buses until forced to do so by state law, that indicate otherwise.

To the extent that the Civil Rights Act of 1964 was necessary, it was only so by virtue of eliminating state laws that imposed segregation, and restricted free markets from functioning.So, what “succeeding centuries have shown” is that government restriction of free markets kept segregation alive for a century after the Civil War. In presenting such a revisionist version of history, either the editors of the New York Times are abysmally ignorant, or they are actively malign.

Or both.

As far as government rescuing the economy from the Great Depression, a number of serious economic historians would argue precisely the opposite. To the extent that the government did end the Great Depression, it did so by absorbing 12 million citizens into the armed forces, and producing billions of dollars worth of war materials, a great proportion of which were destroyed between 1942 and 1945, along with about half a million of those uniformed Americans. Which, I shouldn’t have to point out, hardly commends it much as a general recipe for escaping economic downturns.

In any case, the child-like trust the editors of the New York Times seem to have for government action hardly seems warranted in either instance.