My pinned tweet (the tweet that keeps on your profile page, on notorious social media) reads as follows:
Be advised that “markets” do not vote, they have no direction, no leader. They only function to attribute a price to things. If you threaten not to give back whatever you borrowed, the lender will demand a higher yield. If it deems your threat to be credible, it will not lend you anymore
I am used to angry answers, from time to time. People love to find “markets” guilty for whatever happens, particularly in matters of public finance. The rhetoric of markets versus the people is a classic of contemporary populism.
Don Boudreaux is a master of asking “compared to what?” to uncover hypocrisies and fallacies coming from the interventionist camp. Criticisms of the market economy are, if I may use this word, so embedded in the nirvana fallacy that the latter became something like the default state of mind. The intricacies and shortcomings of real-world markets are opposed to the linear solution which an ideal government could provide. So, instead of having a fair trial, real-world capitalism vs real-world socialism, we do always end up comparing real-world capitalism with ideal-world socialism, and rhetorically the battle is quite easily won.
The greatest Italian economist of the 19th century, Francesco Ferrara (1810-1900), identified precisely this trend in his essay on “Il germanesimo economico in Italia”, which in 1874 noticed that statism was taking over economists in Italy as it did in Germany. Wrote Ferrara:
“the very notion of a State” … “They have mistaken it for a real thing: they figure it exactly as they find it illustrated in a legal handbook, in any philosophy of law and history: they seem unable to realise that this is all an ideal, a vision, a supposition, whereas in the practical world the State is and always was the government, the group of men who have power. And these need to be weighed, not with the ineffable virtues attributed to the ideal body, as instead with the interests, the passions, inseparable from all human beings. Thus is that any economics established on this fallacy will be inherently false. Any feature that should properly be attributed to the ideal State becomes nonsense as soon as it is ascribed to the real one.
Ferrara highlights an essential point: the tendency towards an idealization of the state goes together with a tendency to consider relatively abstract notions as if they were concrete beings. The state is at the same time ideal and something which exists outside its rulers and bureaucrats, and has agency of its own.
Once again, this view is so embedded that it makes it almost impossible to see markets as something thay “non votano, non hanno una regia o un capo”. Markets are identified with particular companies, as it is impossible to come to terms with the fact they are the unintended outcome of billions of transactions. When an ideal state is compared with real markets, if the first is deemed having agency of its own, the latter should too.