Well, yes Tim…

What do we want to see emerge from the greatest crisis of capitalism for 70 years? If I had to answer in a single phrase, I would say: new models for a sustainable social market economy. This requires us to change as well as our states.

That experiment in creating New Soviet Man worked so well, didn\’t it?

One of the values of the liberal economics (classically liberal you understand) that started out with Adam Smith is that it is based on observation. What is it that people do, what motivates them, what are the results of the constraints the real world, or the law, or customs, places upon them?

Once we\’ve got a rough model of reality worked out we can think about how to constrain those undesirable parts of human nature (say, the desire to profit  from monopoly or cartel) and how to boost or liberate those beneficial parts (say, the innate propensity to truck and barter).

There are many other approaches one can take of course. What ought to be rather than what is for example. But if you start by saying, OK, first we\’re going to change the people, then I fear that you are doomed to failure. You\’re into Brechtian territory, perhaps the government should elect a new people?

Another way of putting it. An economy is the sum of interactions of people. If you\’re going to place your hopes of a new economy on the idea that people are going to stop acting like people, well, it\’s going to be pretty tought to get much done, isn\’t it?

4 thoughts on “Well, yes Tim…”

  1. What we need to see emerge from the greatest crisis in central banking for 70 years is a new model for central banking and control of the money supply. That requires us to change nothing about the public. If credit and money itself is not mispriced, bubbles will be mitigated because bad investments will usually be made on an individual basis and not en masse.

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