Sunday, November 06, 2011

Intellectual Cat Fight

I just finally got around to watching last week’s episode of Global Public Square. If you want to see the core debate in America right now -- or if you just want to watch an intellectual cat fight -- this is the video to watch. (I don’t know what’s going on with CNN’s site. The video won’t display with Safari but it does with Firefox. If the video isn’t displayed below, click on the preceding link and read the transcript.)

I’ve read a few books by Niall Ferguson. I liked them all and found them very thought provoking. I have no idea when he turned into the guy that you see here. Perhaps it was when he joined the John McCain’s Presidential campaign. Perhaps it was when he got into an argument with Paul Krugman on economics. In hindsight, neither one of those moves looks very smart.

In short, Mr. Ferguson is a seemingly-good historian with a bad habit of arguing with liberal economists. (Jeffery Sachs is also an economist.) His final argument was somewhat ridiculous from my vantage point.

Niall Ferguson: Well, I'm sure the Chinese are listening to this debate with glee thinking, well, there are still academics in the west who think that the route to salvation is to expand the role of the state because that's certainly not what is happening in China. It is not what is happening in India. It is not what is happening in Brazil. The most dynamic economies in the world today are the ones which are promoting market reforms and reining in the rule of the state, which in those countries grew hypertrophically in the 20th century and that is a big problem in Jeff Sachs' argument.”

The Chinese -- the communists -- are becoming more successful because they are moving away from the extremes of communism. In the meantime, we embraced the extremes of capitalism. The Chinese have learned from their mistakes. The have left the ideological extremes of Mao and have embraced the practicality of capitalism. The jury is still out on us.

We know what works. President Franklin D. Roosevelt showed us the way by regulating capitalism. In doing so, he saved capitalism from itself. And it worked just fine until we started deregulating the banking industry in 1980.

If you look behind the curtain, the economies that are doing so well -- “the most dynamic economies” (Mr. Ferguson’s words) -- are the ones that are indeed “catching up” (Mr. Sachs’ words). They are the ones that were so far down they had no place to go but up. Fareed played right into this thought with the rest of the show about Argentina, and even with the weekly quiz that highlighted how fast Estonia was growing. Argentina was an economic basket case at the beginning of the century. And Estonia is one of Krugman’s poster-child economies.

The last word -- of course -- belonged to taxes. It takes money to run a government. I don’t know which the rich hate more -- paying taxes or knowing that those very taxes will be what pays to regulate their greed.

Don Brown
November 6, 2011

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