[MCN] Mead: Politics & the freedom and regulation of "markets"

[Lance Olsen]

Walter Russell Mead. 
Mortal Splendor : The American Empire in Transition. Pp. 35-36. 
Houghton Mifflin Company, 1987.

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"Regulation was introduced into the American economy to shore up the market,
not to weaken it."
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"The other great tenet of liberalism is its faith in the operation of 
the market. This may surprise some contemporary conservatives, who 
criticize liberals on the grounds that they wish to stifle the market 
by excessive regulation, but such a view oversimplifies the liberal 
position.

"As Gary Wills pointed out in his Nixon Agonistes, the American 
liberal sees the market as a metaphor for all of life, not merely the 
means of economic change. Just as in the free market of Adam Smith an 
invisible hand seems to direct the individual exchanges to produce, 
in the end, the greatest good for the greatest number, so does a free 
political market produce the best political leaders, and a free 
ideological market produce the best ideas."

"Historically, the economic market led not to the development of more 
and more small businesses in a freer and freer environment, but to 
the development of the trusts, great monopolistic corporations. Once 
the market had been invaded by trusts, it could no longer be 
considered free in the old sense. The trusts could and did use their 
great power to crush competition, rather than by 'competing honestly' 
with it. Railroads had a monopoly on transporting farm produce from 
the Middle West to the East: this meant they could charge whatever 
freight rates they liked They did not need to fear competition in the 
short run, because the lines were prohibitively expensive and took 
years to build.

"Those espousing a radical approach might have called for 
nationalization of the railroads, saying that the market had failed 
and needed to be replaced by the state. A lasses-faire conservative 
would have done nothing, believing that nothing could improve the 
situation but the invisible hand. The liberal response was neither to 
do nothing nor to abandon the market; liberals regulated the 
railroads. Where the market did not provide enough competition, the 
government would step in: it would prevent or regulate the monopolies 
that seemed to gain power over the dynamics of the market.

"The liberal view of the market holds that various forces that act on 
the market distort it, and that the intervention of an outside force 
is needed to restore balance. Regulation was introduced into the 
American economy to shore up the market, not to weaken it.

"Liberals also recognized that the market inevitably creates 
short-term injustices and suffering. The business cycle of a market 
economy normally alternates between booms and busts - recessions and 
recoveries, in the euphemisms of today. Once again, liberals seek a 
compromise between abandoning the unemployed and other victims of a 
slump to their own devices and demolishing the market entirely."

-- 
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"Now we have a way of dividing America."

Newt Gingrich, quoted in Greider, William (p. 276)
Who will tell the people. 1992.  Simon & Schuster
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