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Coming Dangers to Economic Freedom

November 17, 2012
Peter Lewin posted some very interesting commentary of Richard Epstein’s distinguished scholar lecture at on-going Southern Economics Association (SEA) meeting. I had the opportunity to hear Epstein several years ago at the Association of Private Enterprise Education meeting and hardily agree with Peter’s assessment that “To hear Epstein talk is awe-inspiring. Hard to describe. Always without notes he delivers intricate, clever, funny, insightful prose without hesitation, seamlessly weaving his web of logic, backwards and forward, while making knockdown points.” Distinguished Guest Lecture:

"The Implications of the Recent Election for Economic Freedom"

Richard Epstein The University of Chicago Law School

Friday, November 16th at 5pm

Peter’s summary:
This afternoon I heard Richard Epstein talk on the implications of the recent election for the economy. He gave the annual distinguished scholar lecture as the SEA meetings. To hear Epstein talk is awe-inspiring. Hard to describe. Always without notes he delivers intricate, clever, funny, insightful prose without hesitation, seamlessly weaving his web of logic, backwards and forward, while making knockdown points. What he said today reinforced my conviction that Obama is by far the worse of the two candidates we faced in this election - though both were pretty bad. Epstein's knowledge of the details of each and every Obama program, the law, the economics, the bureaucracy, ... left me with little doubt on this score - and pretty pessimistic for what lies ahead. In addition he has the rather unique advantage of knowing Obama personally from his University of Chicago days. This is a situation where personality matters a lot. According to Epstein, Obama is the exact opposite of his convivial exterior. He is someone who is extremely unlikely to change his mind on anything and who takes criticism extremely badly. He brings to the White House not your standard self-serving, but flexible politician. He is, rather, someone who is a principled and stubborn believer in policies and values antithetical to the health of the American economy and its civil society. His serious agenda is not the "liberal" agenda of the 1960's which focused on civil rights; rather it is the agenda of the progressive era in America, which sought by the power of government to redesign society from top to bottom. And you see this in every part of the programs he has already addressed. Healthcare, Financial regulation, Environmental policy, Protectionism in international trade, Trade unionism, Education, and more. In every case Obama has skillfully constructed a powerful regulatory apparatus. Where he has been able to use Congress he has obtained the legislation he wanted (and designed), legislation deliberately vague, so as to leave as much discretion for the bureaucracy as possible. Where legislation was unnecessary, or unobtainable he has resorted to administrative discretion, issuing decrees often without the necessary Congressional approval. He knows that the regulated companies and organizations have the option of either obeying or taking the government to court, and that the latter is costly inconvenient and risky, so they almost always comply. In this way, little by little, our freedoms are regulated away. Epstein pointed out that the accumulating regulations act like taxes to sap the creative power of private economic initiatives and when combined with macro tax and spend policies can only have one outcome. The prospect for the future is one of dwindling growth, smaller technological advances, less capital investment in America and slowly declining standards of living, not only for or mostly for the 1% [emphasis mine]. I wish I could do his analysis justice. I can't even come close. But he has expressed this in parts in various places available on the internet and I will be looking for them so as to be able to share more specific detail.
HT to Professor for sharing his comments. Epstein’s analysis reinforces Robert Higgs’s Regime Uncertainty arguments relative to recovery and prosperity and fits with some excellent work by Gwartney, Holcombe, and Lawson on the how growth of government relative to the economy retards economic growth. For my analysis in early 2009 see A Free and Prosperous Commonwealth (A pdf  link to the Gwarnty et al paper is available in this commentary). Ever more reason to continue to support mises.org’s efforts to advance the cause of liberty.  

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