State Fundamentalism
By Tibor Machan - September 25, 2010

True, the idea came to me after having read many of Paul Krugman's missives, both his columns in The New York Times and essays in such magazines as The New York Review of Books. In his often very polemical writings – for a Nobel Laureate he does seem to indulge in polemics more than do most other academics – he nearly always makes reference to market fundamentalism or market fundamentalists, alleging in the process that here in these United States free market capitalism is widely preferred among those thinking about economics and public policy. And that the free market is the status quot! It is all a crock but everyone has the right to speak his or her mind and that's so even if one has but a small one.

In point of fact, in American there is probably much more a state fundamentalism afoot than any respect for the free market system. From labor to business, from farming to the sciences, from the arts to nearly every level of education professionals are always clamoring for the state, for government, to step in a fix and even run things. Yes, this is very true of business – major corporations are the country's most eager welfare clients. Subsidies for this and that, protectionism here, price supports there; there simply is no end to how readily all these elements of our society rush to Congress or the President – or some political body at the local and state levels – so as to bring about health (or at least security) for their industry or firm.

Now, of course, this is just the nature of a mixed economy, which America is, as are all the Western developed countries. Except that no one ever makes the claim that Germany, France, Great Britain, or Australia is in the grip of market fundamentalism, which they are definitely not; but neither is the U.S. Yet the claim is made in many corners, including especially in the American academy. And the motivation for this transparent enough.

Although America's economy is far from capitalist and American academics, even quite a few economists, are far from convinced that capitalism is a sound political economic system, the foes of capitalism are always worried that capitalism could break out all over in America, especially when the mixed economy has been the massive failure no one can reasonably deny. Under such circumstances foes of capitalism, people who love a controlled economy and would gladly do the controlling themselves, must find some way to make sure no one actually blames the mixed system for the failures, let alone those elements of the mixture that are anything but capitalist – e.g., the federal reserve system, the massive regulatory apparatus, the innumerable government officials charged to mange the economy (often actually called "czars"!). So why not do the old fashioned thing and mount a defense of statism by leading an attack on capitalism, the only innocent party to the fiasco.

These folks, let's be clear about it, are state fundamentalists. They love government being in charge of the economy, and they are clearly hoping for a hand in this assignment. The more control the government has over the system, the more their Keynesian plans can be put into effect. As Keynes himself made clear, under a system of central planning, Keynesian measure are easy to implement: "[T]he theory of aggregated production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state [einestotalen Staates] than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire." So why not nudge American toward totalitarianism and then implement the policies recommended by such Keynesians as Professor Krugman? Seems like it is reasonable to assume that this is a game plan of the state fundamentalists.

Bottom line: No market fundamentalism anywhere in sight here but plenty of state fundamentalism is in evidence. And unless the state fundamentalists' fraudulent attacks on free market capitalism are promptly refuted, they may indeed pull off their scam and use the current problems which are the result of the mixed economy to advance their radical statist objectives. (BTW, Keynes himself was not a committed statist – he promoted statist measures only for the short run, unlike many of his epigone.)

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