An answer to Dr. Ken about laissez faire

First Published: 2009-05-01

Dr. Ken is my friend and neighbour.  He is generous to a fault in sharing his medical knowledge and years of accumulated wisdom as a physician. Now retired, he shares his ideas on the Bahamian economy in the “Letters” column of the Tribune.

Dr. Ken, known for his brevity and one-liners wrote:

“The Nassau Institute reportedly stated,  ‘In simple terms we should turn to more laissez-faire capitalism rather than more government planning’.  Really?  Turn toward laissez-faire capitalism?  Isn’t much of the world suffering economically right now largely as a result of laissez-faire capitalism?”

Laissez-fair is an economic doctrine and an ideal.  It has never existed. Therefore the cause of current economic malaise is not laissez-faire capitalism.

The Bahamas was closest to the ideal of economic freedom (laissez-faire) before Independence; a period of phenomenal economic growth. After 1972 the Currency Board was replaced by a Central Bank enabling annual deficits, government expansion and related interventionism.

“Interventionism” is not an economic system, that is, it is not a method which enables people to achieve their aims. It is merely a system of procedures which disturb and eventually destroy the market economy. It hampers production and impairs satisfaction of needs. It does not make people richer; it makes people poorer”. (L.V.Mises)

Dr. Ken and the Nassau Institute have the same goals but differ on the means for achieving them.  He wants more government the Institute wants less.

A “one-liner” for Dr. Ken is President Reagan’s answer to the high unemployment and inflation of the Carter years, when he said: “Government is not the solution to our problems. Government IS the problem”.

And so it is.

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