Free-market economics vs. steady-state economics: how to frame the debate
My recent blog pieces on neo-Malthusian economics, or ‘steady-state economics’ (SSE), have triggered a number of responses. These have ranged from the rather thoughtful to the outright hysterical, with most contributions closer to the latter. But one cannot escape the impression that what boosts the SSE community’s verve and confidence is precisely the fact that they don’t know what free-market economics is, and refuse to acknowledge it.
Let me clarify two repeatedly made misrepresentations. Firstly, there is the SSE community’s insistence that pro-market economists are unaware of the finite nature of the planet’s resources. This is blatantly absurd because economics, free-market or otherwise, is about little else than scarcity. This is the very reason why economists have such a reputation for being party-spoilers. As Thomas Sowell put it: ‘The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.’
The real disagreement between proponents of the free economy and of SSE, then, is in how we should deal with the immutable fact of scarcity – through the political process, or through the market process? Framing the debate in those terms, however, would be much more painstaking. SSE adherents can, of course, stick to their view that most of us are short-sighted and narrow-minded, squandering away the world’s resources as if there were no tomorrow. But then, what they should explain is why they believe that we act more holistically and prudently in our roles as participants of the political process. Let’s suppose, for example, that I had a habit of spending all my earnings immediately after payday, and then reverting to the pawnbroker’s. Why would I then vote for a foresightful fiscal policy, or join a pressure group like the ‘Rally against Debt’?
Secondly, there is the SSE community’s constant rallying against an imaginary figure which exists nowhere except in their own minds. It is the hypothetical ultra-materialistic free-market economist, who believes that happiness is a function of the size of the shopping bag. This mirage is hugely flattering for SSE-adherents. It feels good, I suppose, to think of oneself as a high-minded, refined thinker, standing up against an establishment of boorish philistines.
But the fact remains that free-market economists have precious little to say on lifestyle issues. There is no publication anywhere on this website advising people to spend more time in the shopping centre and less time hiking in forests. Most market-minded economists would be opposed to government restrictions on the sale of bratwurst and wheat beer, but this does not make them ‘advocates’ of bratwurst and wheat beer consumption. You can make the conventional anti-consumerist case that people need government help to get off the ‘consumer treadmill’ and accuse the pro-market economist of being unwilling to provide it, but that would be a very different debate.
And maybe here is the explanation for the hysteria displayed by some in the SSE camp. Dealing with what your intellectual opponent is actually saying, not with what you imagine he might be saying, could raise a few very uncomfortable questions.