The Social Gardener, Part 1

Nearly every day I hear some conservative argue for “free markets” in one form or another.  “Get government off the backs of bidness,” they say. “Free markets are more efficient.” “The Free Market Does It Better.”

George Will recently wrote a scathing piece on liberalism, which ended with this:

Society — hundreds of millions of people making billions of decisions daily — is a marvel of spontaneous order among individuals in voluntary cooperation. Government facilitates this cooperation with roads, schools, police, etc. — and by getting out of its way. This is a sensible, dynamic, prosperous society’s “underlying social contract.”

Okay. That sounds good, on first reading. But let’s look at a part of American life that unquestionably commands the attention of a large majority of the population: sports.

Baseball games, football games, games of all sorts, are managed competitions, not free-for-alls in which anything goes. It is the fact that they are managed competitions that makes them so popular.  If the New England Patriots won every game they played and thus won the Super Bowl every year, football would die.

It’s not just that NFL owners provide the venue  and the equipment (society’s “roads, schools, police,” as Will put it) to play the game. There are elaborate rules and regulations, salary caps, revenue sharing and other managed aspects of the sport, which far from undermining the benefits of competition, actually serve to make competition more beneficial—and more rewarding for everyone involved: owners, players, and in terms of enjoyment, the fans.

This is contrary to the assertion made by laissez-faire advocates, whose voices never tire of telling us that government regulation and intervention stymies creativity and growth and wealth-creation in the larger economy. But the enormous popularity of the highly regulated National Football League disproves the general idea that managing and supervising competition is bad for us.

Now, all of that is relatively easy to understand. We can see it every Sunday this time of year.

What is harder to understand is why the idea continues to thrive in some very visible and noisy sectors that unregulated or nearly unregulated economies are superior to managed economies, despite the empirical evidence against that idea.

There is, of course, the Great Depression, which should have settled the matter forever. But more recently we have the evidence of the Great Recession and its continuing effects, which even laissez-faire high priest Alan Greenspan admitted put him into “a state of shocked disbelief.” Why? The New York Times expressed it this way back in October of 2008:

…as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.

A copy of The Road to Serfdom, by Friedrich Hayek, sits on or near my desk all the time. Hayek’s name is invoked often by free-marketeers, but those folks should actually read what Hayek wrote. He wasn’t exactly a believer in laissez-faire, as this passage from the book makes clear (note: I substituted the word “libertarian” for “liberal” in this passage, to make the meaning clearer to contemporary readers):

The fundamental principle that in the ordering of our affairs we should make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion, is capable of an infinite variety of applications. There is, in particular, all the difference between deliberately creating a system within which competition will work as beneficially as possible and passively accepting institutions as they are. Probably nothing has done so much harm to the [libertarian] cause as the wooden insistence of some [libertarians] on certain rough rules of thumb, above all the principle of laissez faire.

Uh-oh. Did he really mean to say that? Yep:

The attitude of the [libertarian] toward society is like that of a gardener who tends a plant and, in order to create the conditions most favorable to its growth, must know as much as possible about its structure and the way it functions.

That sounds exactly like what I, as a liberal today, believe. We should “make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion.” And we should “create the conditions most favorable” to the growth of society.

What Hayek was referencing was the growth of our understanding of “social forces and the conditions most favorable to their working in a desirable manner.” In other words, the wise social gardener will learn—and continue to learn—what he can about how society, including our capitalist system, works and improve conditions that will help it grow.

What’s wrong with that?

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2 Comments

  1. “What’s wrong with that?”

    Not a darned thing. And I like your football paradigm very much – every game must have rules. Sadly, even now I sense that the ordinary voter knows who caused the housing crisis, but not the underlying regulatory structure that predictably allowed it to happen.

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    • You know, Jim, I think you are exactly right about public ignorance regarding the underlying cause of the housing crisis. Mostly they seem to have some kind of vague notion that greed was at the heart of it, which it was, but the greed needed a mechanism, or a series of mechanisms to work its black magic.

      Sadly that public ignorance is ripe for exploitation by the same guys who engineered (unwittingly) the near collapse of the financial system and there seems to be a perfect storm of slow-growth and high unemployment and general frustration that sets the table for the exploiters.

      Duane

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      Reply

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