The financial world we live in is just as wild, if not more, than the mountains and woods we walk through. We are told that the fundamentals of our economy are strong, but we can feel that something is wrong. My unique financial background and survival passion make Financial Survivalist and excellent place to learn and share.

Wednesday, November 20, 2013

The Near Triumph of Market Economics

This was a very interesting read. The author had formed obvious opinions favoring neo-classical thought. With that in mind, I believe they did a good job summarizing the battle of economic thought that persists today. Something interesting to note is a point made that even though classical economic thought is continuously attacked, somehow the attacks have seemed only to refine it. Today neo-classical thought continues to persevere amongst a diverse academic environment.
I also find the argument interesting that every economic woe to ever exist since Adam Smith is the fault of politicians, Marxists, socialist, and anything not neo-classical leaning. Maybe that argument wasn’t intended. However in that case, it was accidently articulated very well.
I very much liked the point that was mentioned about Friedman desiring a consensus on economic thought. It seems to me that there is a place for neo-classic thought and a place for Keynesian thought. Marx made some good points as well, and to this day I wonder if we will still see the revolution of the worker that he imagined. However, the bickering seams to continue. Not only among academic elite, but among politicians and also among the people in general.
To me, before we can answer the question “Who is right?” we must first answer the question “What is the purpose of economics?” Is it to allocate resources in the most effective way? Is it to improve the quality of life? Is it to grow GDP? I argue that the purpose of economic policy is the same as the purpose of government, to insure life, liberty and the pursuit of happiness. I don’t care how efficiently resources are allocated if I am not free. I would even be willing to sacrifice my standard of living to ensure freedom. I believe the majority of Americans feel that same. I suspect the worldview may be a little different.
The last thing I wanted to comment on was the two opposing views between Musgrave and Buchanan. One trusted Politian’s and the other did not. I don’t know how anyone could trust politicians in general. Power corrupts and though there may be exceptions to the rule, politicians in general are corrupt or become corrupt. This is essential to our economic system because no matter what the best economic choice is, politicians will only do it if it benefits them. This is a universal concept and at the base as to why we fought for our independence.

Two words; term limits. If we imposed term limits on congress then this would eliminate many problems we have. Legislatures would no longer work feverishly to get re-elected. Instead they can do what best for the people. Some might think that gerrymandering would cease, but I think it would continue for party power. So we also need to eliminate gerrymandering. It would be best if we could reset these lines to some kind of generic geographical lines, but even if we didn’t over time demographics would change and the currently lines would mean little for political party re-election. Another problem is fund raising. Congress uses “fund raising” during legislative sessions as a form of extortion. They threaten laws and then the corresponding interest come begging to throw a fundraiser in order to help the congressman see their view of the issues.  If we eliminated fundraising during legislation sessions, combined with previously mentioned items, it would help limit congressional extortion.
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