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Monday, July 29, 2013

Libertarian Idealism: Too Good To Be True

According to Forbes' correspondent, John Tamny, Sen. Elizabeth Warren's proposal to re-enact Glass-Stegall is wrongheaded from the start. 'I hate bailouts as much as the next guy, but if we break up big banks, we'll just get smaller ones facing unbearable "profit pressure for being made artificially small." (Alan: Capitalism does not foster free markets. Rather, capitalism corners markets until everyone of them is subsumed, in theory, by whichever trader is "most fit." The word "pyramid" is often used to describe "the capitalist marketplace" because at bottom lurks the desire for one omnipotent pharaoh to reside "at the top of the pyramid.") Talent and investors will be driven elsewhere, and if those smaller banks are forced to "merge again in order to compete," any failures will rest squarely on the government's shoulders. "Hello bailouts again." The real solution isn't stricter regulation - it's to stop regulating banks altogether. Then we'll "get what we've always wanted in terms of bank size, risk profile, innovation, and everything else that free markets always deliver without fail."

If you belief this last bit -- "always deliver without fail" -- there is a free market capitalist somewhere in Brooklyn waiting to sell you a bridge.

Libertarians are so intent on being "perfectly" right that they provoke the paradoxical effect of being entirely wrong.

H.L. Mencken nailed it: "For every complex problem there is an answer that is clear, simple, and wrong." 
There is no honor in libertarian oversimplification.
Instead, libertarianism is a modern manifestation of pharisaism.
"Here's how to be perfect..." even though no one, not even themselves, aspire to that goal.

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"The terrible thing about our time is precisely the ease with which theories can be put into practice.  The more perfect, the more idealistic the theories, the more dreadful is their realization.  We are at last beginning to rediscover what perhaps men knew better in very ancient times, in primitive times before utopias were thought of: that liberty is bound up with imperfection, and that limitations, imperfections, errors are not only unavoidable but also salutary. The best is not the ideal.  Where what is theoretically best is imposed on everyone as the norm, then there is no longer any room even to be good.  The best, imposed as a norm, becomes evil.”  Conjectures of a Guilty Bystander" by Thomas Merton 



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