
Alan Kirman on Laissez-Faire Economics - bpolania
http://evonomics.com/everything-you-need-to-know-about-laissez-faire-economics/
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yummyfajitas
This article is very poor quality.

 _... GM of course is one of those corporations that Hayek didn’t see were
centrally planned institutions_

Hayek is not stupid; for example, in "The Use of Knowledge in Society" he
explicitly discusses the role of such institutions. He also notes that such
institutions are not truly "centrally planned":

"Even the large and highly mechanized plant keeps going largely because of an
environment upon which it can draw for all sorts of unexpected needs; tiles
for its roof, stationery for its forms, and all the thousand and one kinds of
equipment in which it cannot be self-contained and which the plans for the
operation of the plant require to be readily available in the market."

[http://www.econlib.org/library/Essays/hykKnw1.html](http://www.econlib.org/library/Essays/hykKnw1.html)

Key point - the central planner is only a central planner in a very narrow
sense and heavily depends on markets providing information. Also, competition
between GM and Toyota provides an escape hatch for when GM performs horribly.

 _But again, he never specified closely what the mechanism [of price
adjustment] was._

Perhaps Hayek didn't (I haven't read enough of him to be sure) but generally
econ says that speculators provide the mechanism.

The remainder is just a bunch of whoo, life is so complex that we can't
understand it, yay regulation. Because, um, if a situation is complex you can
be assured that your attempts to control it won't cause unexpected side
effects? Huh?

~~~
xlm1717
Alan Kirman seems to have a contemptful view of Hayek in general, judging from
this article:

>he wasn’t very consistent in his views

>actually he was a horrid man

>but he was extremely bigoted, he was racist

Was he trying to imply if you advocate for free markets you are bigoted and
racist? It sure looks that way...

It seems that he is trying to appeal to emotions throughout most of the
interview in his criticisms of laissez-faire.

The remainder also seems to be a bunch of whoo. To give an example, he talks
about people calling for reform of European labor markets, says the results
will be more temporary workers and less investment in workers. He then gives
the example of Toyota. Toyota doesn't invest in their workers because laws
make it difficult to fire someone. The work culture in Japan contributes more
to this than some government law making it harder to fire people. There is a
social taboo against firing people, so they end up giving incompetent
employees menial work. In fact, the prime minister of Japan is looking to
break up this taboo to make the Japanese economy more flexible. Companies will
invest in promising employees, but don't want to invest in employees who will
not provide a return. There does not need to be government intervention for a
company to invest in an employee.

Another example, he says this in the article:

>The last remark I would make is that to say “you’ve got to get rid of all
those rules and regulations you have”—in general, those rules and regulations
are there for a reason. Again, to use an evolutionary argument, they didn’t
just appear, they got selected for.

They didn't get selected for. They got put in place. The difference is, to
give an example, people didn't just stop buying less cigarettes because they
thought it was bad for their health. Aversion to tobacco didn't just "evolve"
in the market, it didn't get selected for. People stopped buying cigarettes
because an onerous tax was imposed on it and suddenly people were forced to
decide between buying cigarettes and making rent. If you say we have those
regulations for health reasons, you'll get a lot of cigarette smokers saying
they don't care about the health implications, they just want to make the
choice for themselves. If the argument then is that their bad health costs
society in medical expenses, you can argue that this is so because of still
more regulations. This is an example of something that even Kirman admits in
the article:

>It’s absolutely clear that as these regulations accumulate, they weren’t
developed in harmony with each other, so you often get even contradictory
regulations.

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federicobond
What a shallow discussion there. Very poor history of economic ideas and lots
of straw men and intellectually dishonest arguments. I have come to expect it
from journalists and non-academics in general, but it's sad to see them in
academics too.

