Will they never learn?

Academic says US media reform should be part of a march towards socialism

A professor at the University of Illinois Urbana-Champaign, Robert W. McChesney has said that “media reform” should be part of the march toward socialism in America and that capitalism has to be dismantled “brick by brick.”

I am convinced that ideologies are always problematic. As soon as a person falls for an ideology (any ideology!) they cease to be able to use their eyes, ears, or brain if the result would be to see, hear, or understand something that would invalidate the ideology. In 1989 communism fell throughout Europe for blindingly obvious reasons: every single communist regime was murderous, the people were in poverty, and the environment was a disgusting mess. These things were not coincidences. It seems Professor McChesney has never read any Hayek, but if he had, and if he could free himself from his ideology, he would know why socialism necessarily produces tyranny, death, and misery. But no matter how much misery socialism produces, the recipe for heaven on Earth in these ideologues' eyes is always - more socialism!

I don't have much sympathy for the likes of McChesney, but I do have for the many thousands of idealistic people these wreckers suck into their ideologies. I remember how I too fell for this stuff as a young person at university. It seems just - so - tacky - to spend your life trying to make money when we could all be working together for the common good. It seems almost inevitable that socialism is the ideology of compassion, whilst capitalism is that of selfishness. No wonder the ideologue always has an easy job making converts.

Unfortunately there are some practicalities that need to be taken into account. And ignoring them is fatal to the very possibility that socialism can ever work. But this isn't obvious, and one has to set emotions aside to think things through clearly. Not enough people do so, and the consequence is that damage is being done of a kind that can topple human civilisation. And if anyone thinking green imagines that this might be good for animals, please think again. People who are scared, oppressed, or hungry are less likely to be nice to other people or to animals. So, a few truths:

First, money isn't evil. The biblical quote actually says, the love of money is the root of all evil. Wanting to make money isn't necessarily selfish. A fair dealer, whether a business selling good stuff for a fair price, or a worker doing a good day's work for fair pay, both these people are making the world a better place. And the advantage of it is, once you have the money, you can spend it on something that is inspired by your own personal creativity. But under socialism (to each according to their need, from each according to their capacity), someone else, some establishment, some authority, will have to decide on your behalf what your capacity and your needs are. That is why socialism necessarily deteriorates into tyranny. Money puts your future into your hands. Socialism puts it into the hands of some soviet committee.

Both capitalism and socialism can be used by both nice and nasty people, but capitalism leaves some freedom to everyone; socialism almost guarantees that the nastiest, most violent, and hateful people rise to the top and control everyone else, including all the good people.

Next, the problem of wealth is not primarily a problem of distribution (although it can also involve that). The basic problem is to create the wealth in the first place. The hard part of giving someone a slice of cake is not the cutting, but the baking. This is where Hayek's great insights come in. A pricing mechanism reflects a vast range of knowledge that is not and cannot be possessed by a single person (or even a government), even with vast modern computing power. But if all buyers and sellers make sound decisions based on price, prices will reflect costs. Choosing the cheapest item will usually pick the item that has the lowest real cost, which will also reflect the lowest impact on the environment, and so on.

But what goes wrong? Probably many things, but I'll mention two. It certainly is true that a lot of people think a free market implies no rules and no morality (and act accordingly!). But nothing in the basic theory of a free market implies in any way that we can be or should be immoral, or use market theory as an excuse to 'chisel' others. Being nasty is an unrelated idea to that of the free market.

Secondly (and I think even Hayek failed to notice this), even if a free market reflects true costs, it does not do so immediately: every pricing network has a 'relaxation time' built in: a changed cost takes time to filter through the system: stocks bought at the old price must be exhausted, transportation time means that there can be another delay, and so on. Secondly, people are not and cannot be completely rational. Nor can they have infinite computing power available. These things mean that it is possible to complicate a market to the point that many or most people will not be able to make rational choices. This certainly happens in the stock market with complex derivative products—and this is a good reason to ban them, but I'll write more about that later.

And a final point: a free market is not equivalent to a rule-free free-for-all. This is probably the main reason so much antipathy to free markets. It is quite certain that very many very selfish corporations, tycoons, etc., used the economic rationalist ideology to amass vast fortunes by misusing markets. This is because a free market actually needs rules. A few decades ago we were sold on the notion that all sorts of things should be 'deregulated', 'self-policed', and so on. But these things broke the free market, rather than support it.

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