Monday, 27 January 1997
The Editors, Los Angeles Times
Times Mirror Square, Los Angeles, CA 90053
re: Commentary, "A Warning From a Consummate Player," Robert Kuttner, Monday, January 27, 1997
It is not clear why Robert Kuttner needs to issue "warnings" about laissez-faire capitalism, when the only place in the world where laissez-faire capitalism might be argued to exist today is in Hong Kong. All the political problems that exist today, social security (headed for bankruptcy), slow growth (negative real economic growth in places like France in 1996), historically high unemployment (almost 12% in France, and still over 7% in Los Angeles County), etc., are not because of laissez-faire capitalism but because of all the measures that have been taken in this century to supposedly do things better than capitalism had been doing.
So just where Kuttner thinks that this "untrammeled intensification of laissez-faire capitalism" is occurring is a little mysterious. With new command and control mandates for things like health insurance, even a Republican Congress still seems intent on "building socialism." On the other hand, the "spread of market values" is occurring in places where they didn't exist before, like Eastern Europe, and in some places, like New Zealand and Sweden, that had dug themselves so far into a socialist hole that they finally realized that it only remained to fill in the hole to kill their economies completely. It is nice to know that some places are pulling themselves out.
Mr. Kuttner exults in finding a bona fide capitalist, George Soros, to second his pointless warnings. Mr. Soros has certainly made a lot of money, and he has contributed to multiple worthy causes, including (bless him) medical marijuana; but it has never been the case that successful capitalists necessarily understood how capitalism worked. When Henry Ford urged Herbert Hoover to see to it that businesses refrained from cutting wages in the crash and recession of 1929, to prevent anything worse from happening, he guaranteed that something very much worse would happen: The Great Depression. Henry Ford was, I think, a successful capitalist.
Mr. Soros, then, if he thinks that the pursuit of private interest in the free market does not produce a common good, and that a "common interest" must be promoted by political action, has missed the basic principle of how private transactions in a free market actually do produce common goods. For that, he should take a step beyond his friend Karl Popper and read Popper's own friend, the great economist F.A. Hayek, who will set him, and Mr. Kuttner, straight about laissez-faire capitalism.
Kelley L. Ross
Department of Philosophy
Los Angeles Valley College