One Size Does Not Fit All

Abstract

January 2004 · Historically Speaking2 1 Counterrevolution in all its variants. The collectivist delusionwas fladyincompatiblewith an international division of labor: when the formerwas ascendant, the latter could notsurvive . For collectivism invariablyattached itself to the ready means of the nation-state, and once so ensconced, it helped to stoke aggressive , beggar-thy-neighbor nationalism. In a world of centralized and increasingly regimented states whose interests could not help but clash, conflict was inevitable. In the years afterWorld War ? there was a partial reconstruction of the international economy, led by the United States, Western Europe, andJapan. But the continued ascendancy of the Industrial Counterrevolution made true globalization impossible. After all, the bulk ofthe world's population, located in the Communist bloc and the so-called Third World, lived under rabidly collectivist regimes thatrejected theveryideaofan international market economy. Only in the past couple ofdecades has the counterrevolutionarymomentum exhausted itselfin disillusionment and failure. And as overweening state control has receded—with the opening of China, the fall ofthe Soviet empire, and many Third World countries' abandonment of state-dominated models of development— market connections have been reestablished. The death ofthe dream ofcentralized control has marked the rebirth ofglobalization. But the collectivist past continues to cast long shadows. The move toward more liberal policies has occurred amidst the ruins of the old order, and so has had to contend with grossly deformed conditions. The transition, as a consequence, has been wrenching and often brutally painful. And that transition is far from complete. The world economyis Uttered still with the wreckage of discredited systems, constrainingthe presentand obscuring the future. Life has left the old regime, but the dead hand ofits accumulated institutions , mindsets, and vested interests continues to weigh heavilyupon the world. Against that dead hand—which includes, among other things, the ideologicallydistorted misunderstanding of globalization's past—the cause of freedom must contend for many decades to come. Brink Lindsey is the director ofthe Cato Institutes Centerfor Trade Policy Studies. One Size Does Not Fit All Alfred C. Mierzejewski BrinkLindseyattempts to provide a general explanation for opposition to free markets and globalization. He contends that a movement straddling ideological divisions between Left and Righthas promoted the adoption oftop-down, centraUzed control since the late 19th century. In doing so, he makes a laudable effort to use historyto explain current developments. In reading his essay, I wondered whether there was a theoretical framework underlying Lindsey's analysis. Therefore, I decided to read his bookAgainst the DeadHand: The Uncertain Strugglefor Global Capitalism. His article is a summary ofthe historical component of that work, omitting the theoretical and contemporary political aspects. Interestingly , he bases bis argument in the book on the theoretical concepts oftheNobel prize winning economist Friedrich von Hayek. Having been a student ofthe ideas ofHayek and those ofhis mentor Ludwig von Mises for manyyears, I find Lindsey's use ofHayek's theories enUghtening. In his book, Lindsey provides a good summaryofsome ofHayek's key insights that is intelligible to the reader unfamüiarwith economic theory and unwilling to wade through the Austrian's dense prose. Probably the most important of Hayek's ideas presented by Lindsey is the notion ofmarkets as discovery mechanisms. Hayekis jusdyfamous for this concept. Markets , in addition to helping us allocate resources, are also a means for finding useful knowledge and makingit available to consumers everywhere. Markets are capable of doing these wondrous things because they are decentralized. Lindsey points out how those who criticize markets as chaotic are wrong. Markets in fact involve a good deal ofplanning, buton a decenrraUzed basis. For this reason, theyare much more effective than any central planning apparatus could ever be.1 Using Hayek as a foundation, Lindsey builds an explanation, summarized in his article , ofhowcentraUzed, top-down governance became the dominantpoUtical and economic model in the late 19th century. He correcdy points to the widespread fear of change as a critical factor leading people to seek refuge in collective solutions. Lindsey is rightto typifythis as an atavisticimpulse. SociaUsm is in fact a backward lookingphilosophy. Lindsey calls the entire drive toward centraUzation a "backto the future" oudook. I would suggest that "advancing to the past" would be more apt. He also righdyhighUghts the engineering mentaUty which, as...