Page 37 - Šolsko polje, XXIX, 2018, no. 1-2: The Language of Neoliberal Education, ed. Mitja Sardoč
P. 37
m. olssen ■ neoliberalism and laissez-faire: the retreat from naturalism
by social democrats and socialists who Simons most vehemently opposed
and who advocated forms of state regulation of economic processes be-
cause they distrusted unregulated marketplace interactions. According
to J. Bradford De Long of Harvard University, who also cites the quota-
tion above (1990: p. 601), Coase’s question (above) raised some interest-
ing responses:
Simons former Chicago pupils, his successors as upholders of classical lib-
eralism in economics, did not rise to his defense. Instead, they responded
as follows: First, they acknowledged that Simons was not a pure liberal
but at best a mixed breed. “You can paint him with different colors …,”
said Harold Demsetz. It’s quite a mixed picture”, said George Stigler. Sec-
ond, they admitted that Simons was an ‘interventionist,’ that he did not
believe that in general economic activity should be organized through
free markets. “[H]e was the man who said that the Federal Trade Com-
mission should be the most important agency in government, a phrase
that surely should be on no one’s tombstone”, joked Stigler. “Everything
Ronald Coase says is right.” And Milton Friedman joined in: “I’ve gone
back and re-read the Positive Program and been astounded…. To think that
I thought at the time that it was strongly pro-free market in orientation!.
(cited, De Long, pp. 601–2.)
Not only did Simons advocate regulation, but he even advocated na-
tionalization. As Simons states in his pamphlet:
Political control of utility charges is imperative … for competition sim-
ply cannot function effectively as an agency of control…. In general…
the state should face the necessity of actually taking over, owning, and
managing directly, both railroads and utilities, and all other industries
to which it is impossible to maintain effectively competitive conditions.
(Simons, 1947: p. 57)
De Long defends Simons as a classical liberal on the grounds that
“[Simons] thought that a primary function of government in a free society
is to manage competition” (De Long: p. 610). Simons represented a strain
of thinking in liberal economics that had been prominent in Europe in
the work of the German Ordo Liberals, foremost amongst them, econo-
mists such as Eücken and Röpke, who distinguished the ‘conditions’ nec-
essary to sustain a free market economy from the intervention of the gov-
ernment in the processes or actual functioning of the economy itself.
35
by social democrats and socialists who Simons most vehemently opposed
and who advocated forms of state regulation of economic processes be-
cause they distrusted unregulated marketplace interactions. According
to J. Bradford De Long of Harvard University, who also cites the quota-
tion above (1990: p. 601), Coase’s question (above) raised some interest-
ing responses:
Simons former Chicago pupils, his successors as upholders of classical lib-
eralism in economics, did not rise to his defense. Instead, they responded
as follows: First, they acknowledged that Simons was not a pure liberal
but at best a mixed breed. “You can paint him with different colors …,”
said Harold Demsetz. It’s quite a mixed picture”, said George Stigler. Sec-
ond, they admitted that Simons was an ‘interventionist,’ that he did not
believe that in general economic activity should be organized through
free markets. “[H]e was the man who said that the Federal Trade Com-
mission should be the most important agency in government, a phrase
that surely should be on no one’s tombstone”, joked Stigler. “Everything
Ronald Coase says is right.” And Milton Friedman joined in: “I’ve gone
back and re-read the Positive Program and been astounded…. To think that
I thought at the time that it was strongly pro-free market in orientation!.
(cited, De Long, pp. 601–2.)
Not only did Simons advocate regulation, but he even advocated na-
tionalization. As Simons states in his pamphlet:
Political control of utility charges is imperative … for competition sim-
ply cannot function effectively as an agency of control…. In general…
the state should face the necessity of actually taking over, owning, and
managing directly, both railroads and utilities, and all other industries
to which it is impossible to maintain effectively competitive conditions.
(Simons, 1947: p. 57)
De Long defends Simons as a classical liberal on the grounds that
“[Simons] thought that a primary function of government in a free society
is to manage competition” (De Long: p. 610). Simons represented a strain
of thinking in liberal economics that had been prominent in Europe in
the work of the German Ordo Liberals, foremost amongst them, econo-
mists such as Eücken and Röpke, who distinguished the ‘conditions’ nec-
essary to sustain a free market economy from the intervention of the gov-
ernment in the processes or actual functioning of the economy itself.
35
