Free Market Fundamentalism

In today's Pundit Round-Up, the Kos quoted Paul Krugman:

I suspect that the main reason for the dramatic swing in the polls is something less concrete and more meta than the fact that events have discredited free-market fundamentalism. As the economic scene has darkened, I’d argue, Americans have rediscovered the virtue of seriousness. And this has worked to Mr. Obama’s advantage, because his opponent has run a deeply unserious campaign.

This is not a new term, but it was popularized by George Soros, and it is a dangerous one. Be ready to see it more and more. For those not inclinded to read the entire Wikipedia article, it essentially means, a belief that free markets are best served when individuals pursue their self interests. It is a pejorative term, essentially saying that a faith in pure free markets is wrong. If you remember the movie, A Beautiful Mind, the main character, John Nash (played by Russell Crowe,) questioned Adam Smith's invisible hand theory. Here is what it says:

The invisible hand is a metaphor coined by the economist Adam Smith. Once in The Wealth of Nations and other writings, Smith demonstrated that, in a free market, an
individual pursuing his own self-interest tends to also promote the good of his community as a whole through a principle that he called “the invisible hand”. He argued that each individual maximizing revenue for himself maximizes the total revenue of society as a whole, as this is identical with the sum total of individual revenues.

John Nash in his most famous theory, refutes Adam Smith in application of his game theory, specifically named the Nash equilibrium. I know I am oversimplifying, but it basically says in application to economics, that everybody does better, if everybody acts in their own self interest and in the self-interest of others. A quick example, if you could make 5% by investing yourself, or 50% by investing as a group, then it is in everyone's best interest to invest as a group.

All of this sounds great, the problem is, that a pur Nash equilibrium can never exist in the global economy. So it is a typical liberal proposition, it works on paper, or in pure intellectual minds, but could never work in the real world.

This is important to the discussion. Market Fundamentalism is at its core, an attack on Capitalism. Progressive, is a repackaging of Socialism. Fairness in application to taxes, health care, gas prices, energy, education, among other things, is a hidden form of Totalitarianism. Regulation of Free Markets, is a trojan horse term for Communism.

The thought process is that if the government controls all of the levers, everything can be made fair, and all of us can live in huge houses, drive fancy cars, afford the latest toys, and not work that hard. When the message is delivered by a young charismatic celebrity, following a incredibly unpopular President, it becomes even harder to push back. History has shown what happens when countries suspend belief and turn to the loving embrace of big government. This movie has played before and if we elect Obama, we are guaranteeing change that we cannot afford.

Here is a preview of the coming onslaught, here, here, here, here, and here.

In Response To: Your Abbreviated Pundit Round-up