A quote from today's column by David Limbaugh (the saner brother) and a few comments from me

[fpb]

No central planning-type guru is as smart at allocating scarce resources as a free market pricing mechanism.(David Limbaugh, Townhall.com, 6 January 2009

Comments

[cerebresque]

Well, as a free-marketer in general, I'd point out that that statement is about the efficiency of free-markets versus central planning in allocating resources to produce what we want, and doesn't really touch on the issue of what we ought to want. Which is something less in the field of economics and more in that of morality.

As a cynical free-marketer, however, I'd add that that the invisible hand will deliver self-abasement and self-destruction in copious quantities and with tremendous efficiency to people who desire them is a feature, not a bug

[fpb]

If the harm of self-destructive choices were restricted to those who make them, I could agree with you. Since they debase the whole of society - just think of pornography - I still think this is a major criticism of free marketeerism, certainly in the naively arrogant formulation of Mr.Limbaugh and his likes.

[cerebresque]

I won't deny that you have a point, because I'm fairly certain that I'd agree with you on the harmful externalities of most of the things in question.

On the other hand, I would still hold that this is less an issue of free market vs. central planning (how we get what we want), but rather an issue of morality (what we ought to want). Assuming, arguendo, that we can address the latter by legislatively banning pornography, drugs, etc. from the sphere of what we ought to want or at least what we can be able to get, then that's really orthogonal to the question of how we allocate resources in the remaining economy. And I would argue that you can thus ban pornography and drugs and still have a free market in goods, just like we can ban murder-for-hire and still have a free market in services

[fpb]

I do not think that it is alien to the matter of free markets. The point is that you admit government intervention into the markets, limiting or preventing the supply of a widely saleable good, because such a good is not just immoral in itself - that, I tend to agree, would be no business of the State - but because its consequences make it socially damaging. At that point, you have admitted the right of the state to control the markets in order to restrict or prevent the circulation of socially damaging goods. After that, how and where to interene in the markets is merely a question of practicality and, above all, of preferences. You may decide. for instance, that it s socially necessary to favour public transport over individual car driving and structure taxation and legislation to that purpose. Or you may decide it is better to favour the car industry, Either way, you are intervening in the market; and indeed you cannot avoid it, because such a thing as neutral taxation does not exist. The State has to tax; and, having to tax