Monday, March 24, 2008

Too Early for a Solution...

Dr. Reisman's post provides an exposition of the current financial crisis and a short and long term remedy. As he says, although it is extremely unlikely that his proposal will be considered, the first step towards a solution is to understand what needs to be accomplished even if it is not acted upon presently.

Although he is right in attributing a large part of this crisis to a "stew of [economic] ignorance", I would go further and say that economic ignorance is not the primary reason we are at this stage. The explanation lies more fundamentally in philosophy. It is the modern philosophers rejection of the absolutism of reason and the consequent intellectual anarchy reigning in the fields of ethics, epistemology, and politics which has put us in this mess. Many who offer brilliantly rational arguments based on economic science take for granted that economic prosperity and a high standard of living would be considered desirable by today's intellectuals. These are the same intellectuals who call for "pain at the pump" to help a "sick planet" and who block the construction of housing, research laboratories, and new roads in favor of gnats and swamps. These are the same intellectuals who tell us that one cannot judge a culture that respects individual rights, science, and economic freedom to be superior to a culture based on superstition, mysticism and despotism.

As he points out, it is still entirely necessary to understand his plan as a means to achieving economic freedom and rescue from the current crisis, but the intellectual climate must be radically altered before the "solution" is even desired much less executed.

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