Tuesday, 4 November 2008

Cheering economic dictatorship

It's been said that when nationalisation comes to America, first in line to praise it will be the conservatives.  Case in point: an article in this week's Wall St Journal by a so called economic historian, who praises the current regime's plans to nationalise the financial markets by assuming stock ownership in banks, and cheers plans to appoint the US Treasury secretary as the nation's first financial dictator. He thinks this will finally, at long last, achieve the dream of a "unified and coherent regulatory system free of undue political influence." 


But as economics professor Thomas DiLorenzo points out,

The system of financial regulatory dictatorship that [the article's author] praises, and which is about to be forced down the throats of the American public, has been tried before in other countries. During one of its own periodic financial crises, Italian government officials complained bitterly, as Gordon does, of regulation that has been "disorganic" and "case by case, as the need arises." The Italian regime altered its regulatory system so that it could pursue "certain fixed objectives," just as Gordon argues for a "unified and coherent regulatory system." This highly centralized or even dictatorial regulatory system, the Italians argued, would supposedly "introduce order in the economic field" and achieve the goal of "unity of aim" with regard to government regulation of industry.

All of the words in quotation marks in the preceding paragraph, except for the last ones, are the words of Benito Mussolini. The "unity of aim" phrase was from Mussolini apologist/propagandist Fausto Pitigliani. There is, after all, a very keen similarity between Hamiltonian mercantilism — or an economy directed and controlled by government, supposedly "in the public interest" but in reality for the benefit of a privileged few — and the economic fascism of Italy (and Germany) of the 1920s and '30s.

These are dangerous times indeed.

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