Saturday, May 3, 2008

A "peaceful struggle between two opposing forces: collectivist and anti-collectivist"

The other front in the battle of ideas:

In western democracies one could expect that the free market would be self-supporting because of its superior economic performance. However, history is full of episodes of statism: market re­forms typically meet resistance and re­main in danger of being left in­complete or even reversed. How to explain that? I would suggest that the direction of institutional change in democracies results from a constant, peaceful struggle between two opposing forces: collectivist and anti-collectivist. Any shift is triggered by a traumatic event that interacts with established beliefs.
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History is open-ended, leaving no room for fatalism or passive optimism. The economic crisis is a great educator, but it is better to reform under more normal conditions. To achieve that, believers in limited government and free markets must defeat their collectivist foes in the battle of ideas. They need to appeal to reason and a sense of fairness. Collectivists should not be allowed to occupy the moral high ground. High structural unemployment, the misuse of poorly structured social transfers – all products of statist policies – are simply unjust. Free market advocates should highlight benchmarks, comparing bureaucratic burdens on business or the investment climate between countries. Statism does not need to prevail.

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