A Thought On Laissez Faire

An interesting analysis of 'laissez faire' economics from Sunstein:

"Economic value does not predate law, it is created by law."

"Of course many people work hard and many others do not. But the distribution of wealth is not simply a product of hard work; it depends on a coercive network of legal rights and obligations. ...[T]he laws of property, contract, and tort are social creations that allocate certain rights to some people and deny them to others. These forms of law represent large-scale government 'interventions' into the economy. They are coercive to the extend that they prohibit people from engaging in desired activities. If homeless people lack a place to live, it is not because of God's will or nature. It is because the rules of property are invoked and enforced to evict them, if necessary by force. If employees have to work long hours and make little money, it is because of the prevailing rules of property and contract. ... Sometimes those rules disserve liberty."

This reveals the "myth" of Laissez-faire. Those who most demand "no" government intervention in the marketplace because of their wealth and power owe the vast majority of their wealth and power to the specific intervention of the government in the marketplace by enforcing one particular set of rules and laws of property and contract. What these "free market" advocates are really saying is that they want the rules to continue to be set and stacked in their favor, rather in ways that may better serve both society and liberty for all.

It is important to note that values and behaviors regarding economic success or failure do not occur in a vacuum. It is the governance, or the lack thereof, that sets the tone for how business is done and what opportunities become accessible. In my experience, it seems always be those with criminal or abusive intent that want the least amount of oversight or limitation on their actions. Progressive and pragmatic governments work, through the law, to arbitrate between the various classes and interests in a sense of fairness and evenhanded jurisprudence,irrespective of economic theory or prevailing political preference.

Kol Tuv