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For the Goldi-Locks armchair economist, no price is good. Prices are always too high, too low or too stagnant. The same seems to be true of competition. Anti-capitalists are entirely obsessed with the idea that if we allow markets to run wild, corporations will grow larger and larger and larger and exert undue influence over not just the economy but the political process as well. So the fear of monopoly, despite misunderstanding the true nature and threat of competition and lacking much empirical support, is perhaps the most prevalent argument of the anti-capitalists.

Except when we are talking about the production of money. You see, the government needs to take control of money because if we allowed the production of private bank (and other) monies, there would be “too much” competition. We would have thousands of different currencies and forms of money running around, debasement would be rampant, counterfeiting would be rampant, and we would all be so confused about comparing the different denominations and brands of money that chaos would ensue. So, when it comes to money, we need a monopoly, preferably a government one (little do anti-capitalists realize we have a kinky hybrid now). Now of course this assumption is wrong too, but that doesn’t stop the anti-capitalists.

So, competition is bad because it produces monopoly. Competition is bad because it produces lots of firms. In other words, there is no science here. Capitalism is bad because it has competition. And of course, that premise is wrong too, because it totally and thoroughly gets wrong where competition comes from, and it has nothing at all to do with the particular economic system we are operating under/with. But I would not expect an anti-capitalist to think deeply about that.

What is most repugnant about the Goldi-Locks theories of the economy is that they are what Hayek called “Scientistic.” Arguments that appear scientific, using the language of science, but are actually nothing of the sort. The “E”nvironmental movement has long since abdicated this ignominious throne – they’ve long since shed the veil of science.  You might be sensing that I am getting increasingly agitated and aggravated. That would be correct as far as economics goes, but personally I am pulling back from it, so am at a strangely happy place these days.

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3 Responses to “Goldi-Locks, the Armchair Banking Theorist”

  1. Speedmaster says:

    And they want everything to be “local,” except for lawmaking, control, decisions, and education.

  2. Harry says:

    Even though I am a political economy junkie, I cannot remember, ever, reading or hearing anyone making even a semi-cogent critique of The Road to Serfdom. Maybe we should have had a seminar on it , but I doubt any critics would have come to offer, for example, their epistemological objections. It is if the question was never raised, ever acknowledged.

    When it comes down to the nitty gritty, they hide like crickets, or, more like cockroaches.

    This afternoon GDP came in negative, even counting government spending, and everyone on the news regarded this as a big surprise. I guess this means the fed should step up their program to buy sub-prime securities with no discernible collateral, taking bad securities off the hands of the banks. In this limited way, OWS had a point. Forty billion a month to buy mystery bonds, and another forty five billion a month to revive the construction trades, so your next house will cost you more, wiping out your equity and cutting your grandmother’s current income.

    This is progress.

  3. Harry says:

    That said, I am happy for Wintercow’s serenity for the moment. As Rochester gets the wrath of lake effect storms caused by the effects of freedom and the Industrial Revolution, he can take comfort in his waffle recipes.

    Just make sure you put butter, not oleomargarine on your waffles. Other dairy spreads are ok, too. If you cannot eat the butter, mess it up, and toss it to the raccoons. Kathleen Sibelius wants your daily blood sugar results, and your weight.

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