By Alan W. Block: The Orange County Register
It’s almost enough to make you wonder whether the cause of individual liberty is lost.
Shortly after the financial crisis hit, Jacob Weisberg, editor in chief of the online magazine Slate, wrote an article with the headline “Libertarianism is dead.”
The burden of the piece was that, since deregulation and untrammeled free markets have been so thoroughly discredited by this crisis, libertarians should just crawl in their holes and never be heard from again. And the attitude that this crisis means what we really need is more regulation and a retreat from the “theology” of free markets was heard on all sides, from the Obama campaign to the McCain campaign to most of the commentary on network and cable news.
Weisberg was wrong in his assessment of the causes of the financial crisis, of course. Not only was it not due to deregulation, but one of the pieces of deregulation, the 1999 repeal of the Depression-era Glass-Steagall Act, which erased the legal barrier preventing the same firm from engaging in investment banking as well as commercial banking, left those who had taken advantage of it (Bank of America) still standing while several who didn’t do so (Lehman Brothers) failed.
Deregulation actually contributed to financial stability. The crisis was precipitated by years, even decades, of government inducements to grant mortgages to people who would not have qualified under older rules, creating a housing bubble that had to burst sooner or later.
The trigger was the failure of the two government-sponsored secondary mortgage market giants, Fannie Mae and Freddie Mac, something that free-market economists had been predicting for years.
Still, even in the face of all the evidence that the financial crisis was induced by too much government intervention into the marketplace rather than too little, the crisis almost certainly tipped the presidential election in favor of the candidate who could most credibly promise stricter future regulation and more expansive government intervention — more hair of the dog that bit the markets.
Almost all the talking heads and most newspapers attributed the meltdown to a supposed “orgy” of deregulation under President George W. Bush when, in fact, while the Bushies occasionally talked the deregulation talk they never walked the walk.
The facts, then, are on the side of advocates of free minds and free markets, but public opinion, at least at this point, seems firmly lodged on the side of desiring further government intervention and manipulation of the marketplace. It gives one pause.
Has the mission of R.C. Hoiles, founder of Freedom Communications Inc., and whose Nov. 24 birthday our newspapers celebrate Monday as Founder’s Day, to offer facts and arguments on behalf of free markets and personal liberty, been for naught? As the company itself battles in a tough market for all newspapers, has the company’s ideological mission failed?
There are reasons to be concerned, but on balance, I feel reasonably sure that the cause of liberty to which R.C. devoted his life and his considerable business skills, while it might have some tough sledding ahead, will not fall into the dustbin of history.
In the late 1930s and 1940s, when R.C. Hoiles was reading everything he could get his hands on and working out a political philosophy, which evolved from a fairly standard-issue devotion to the U.S. Constitution to a full-fledged fealty to what he called “voluntarism” (which most people today would call libertarianism, though he was never quite comfortable with that label) he was going much more against the tide than we are today.
President Roosevelt had installed the New Deal, to the applause of almost all the cultured classes, and John Maynard Keynes had provided the theoretical economic underpinning, which quickly came to dominate academe, for widespread government intervention into the economy.
A Ludwig von Mises, a giant in economic theory in Europe, couldn’t get a job at any American university when he escaped Austria just before the Nazi takeover. Most of the chattering classes took it as a given that some form of socialism was the wave of the future, that backward-looking capitalism was already dead. Holding out against this tide earned R.C. the moniker from Time magazine of “the weird Uncle Harold of the newspaper business.”
But R.C. had read his Adam Smith, Bastiat, Mises, Hayek and others, and he was convinced that socialism (let alone communism) was inherently unstable as well as cruel. He helped to promote the few liberty-minded writers, like Ayn Rand, Isabel Paterson and Rose Wilder Lane, who arose during the 1940s, and reprinted the work of more established commentators like Albert Jay Nock. He provided Leonard Read with some of the seed money to establish the Foundation for Economic Education. He distributed pamphlets to everybody he met. He never gave up hope. And eventually a freedom movement grew and increased in influence.
Reason magazine, at its 40th anniversary banquet Nov. 14, recognized the past and present importance of R.C. Hoiles and his family by giving its Flame of Freedom Award to longtime