The actually-existing system of institutions at any given moment is the result of a wickedly complex interaction of forces. In particular, the character of heavily government-regulated market institutions, like ours, is the outcome of set of bargains between public opinion-sensitive legislators in the democratic body, between competing ideological constituencies within regulatory agencies, between possible targets of regulation and legislators, and on and on and on.
This is in fact the system Weisberg seems to demands. He’s at least OK with it. His problem with the status quo apparently has nothing to do with the deeper structure, or the chronically unstable strategic character, of this system. His problem is simply that the wrong bargains sometimes get struck. Weisberg correctly notes, in the vacuous manner characteristic to this immensely popular but truly sophmoric conception of political economy, that the last disastrously bad set of bargains wouldn’t have been struck had the contents of the minds of key players been different in certain ways. Indeed. So… what? So when the bargaining outcome leads to instability and massive structural failure, the correct response is simply to attempt to ensure that, in the future, people who believe certain things are not key players. This is preferably accomplished by ensuring that, in the future, no one of significance believes those things at all.
Is there any reason to believe this is not Jacob Weisberg’s way of thinking? Is there any reason not to think it is monumentally stupid?
The most obvious objection goes to the “hack” charge. There are an indefinite number of beliefs without which the actual bargain would not have been struck. Some of them are more causally fundamental than others. For example, remove the idea that the government ought to encourage and subsidize homeownership, and what do we have left of the main forces behind the financial crisis? I’d say we have nothing left. So there’s our culprit, right? And so in terms of Weisbergian political economy, we ought to shore up our system by discrediting that idea, which we can do in part by pointing out its crucial role in the crisis. “Down with the American Dream!” Is this what Weisberg does? It is not. Why not? Cough.
The deeper objection is that it’s just retarded to implicitly affirm a system so easily destabilized by ideological diversity. If a smattering of libertarian ideas can bring it all down, then the problem isn’t really libertarian ideas, is it? If the integrity of the economy in your preferred model requires a high level of ideological conformity, you might think to reconsider the wisdom of harnessing it so thoroughly to democratic political institutions meant to accomodate pluralism.
Weisberg’s implicit model seems to involve witty magazine writers ensuring the stability of our economic institutions by declaring some ideas out of fashion. We libertarians can only covet this level of intellectually maturity.
Will Wilkinson 