Samizdata

When I heard Gordon Kerr speak in the House of Commons a week ago, I wished that he had done so with a microphone attached. Very early this morning he spoke in public again and this time he did have a microphone attached, because he was on Bloomberg Television. Turn up the volume on your computer and you’ll find it a lot easier to hear what he said this morning than I did last week.

Kerr confirmed my definite impression that the Austrianist team is now starting to win this argument. (By “this argument”, I mean, approximately speaking, this argument.)

Whereas regular academic economists talked about how this banking crisis was all over bar the recovery in 2008, the Austrianists have consistently predicted further disasters. As these disasters have duly occurred, the books and writers and ideas that the Austrianists keep referring to in their increasingly frequent public performances (Kerr mentions Hayek in this performance) are now breaking out of their academic-stroke-hobbyist ghetto and reaching the mainstream.

My favourite moment in this quiet little early morning Bloomberg TV conversation was when the man whom Kerr was arguing with said: “But if banks told the truth about the value of their assets, that would cause chaos.” His argument being that therefore making the banks tell the truth is a disastrous policy. Which it sort of is. But Kerr’s point, the point made by all Austrianists, is that disaster can’t now be avoided. The decisions that have made disaster inevitable have all now been made. By postponing the recognition of disaster, you only make it all the greater when it finally erupts.

Intellectual self-confidence is hugely important in a battle of ideas, such as we are witnessing now. The Keynesians, anti-capitalists, the more-of-the-samists, the borrowers-and-spenders and the rest of them, all want to believe that capitalism has to be managed by them if it is to work properly, in approximately the manner in which these people manage it now and have been managing it for the last few decades. Some of them still want to believe that capitalism itself ought to be smashed up, and entirely replaced by a planned economy. But how many people really think that this kind of thing would actually make the world more prosperous? The point is: the hatred of truly liberated, untramelled, uncontrolled, un-managed capitalism is all still there. But, the conviction that there is a superior statist alternative, not strong before this crisis became evident but briefly puffed up by the early stages of the crisis, is now fading away in front of our eyes.

Passionate and sincere belief in a viable, partly or wholly statist alternative to capitalism used to exist, in the early part of the twentieth century. Then, Marxists really believed that capitalism was colossally wasteful and inefficient, as well as colossally cruel and unjust and unfair, and that replacing it with a world run by small clumps of smart people with dictatorial powers, based in small but dictatorially powerful offices, would genuinely be a colossal improvement. They really and truly thought this. They believed it with the same certainty that naval tacticians, then and since, have believed (rightly) that vulnerable merchant ships are safer, during a merchant shipping war, if they all sail together in a convoy, rather than if every merchant ship sails alone. That being one of the arguments they used. This colossal Marxist and statist intellectual self-confidence was contagious and, when crisis hit Russia during World War 1 and the West at the end of the 1920s, it was hard to resist.

Now it is the Austrianists and only the Austrianists who have any genuine confidence in the correctness of their own ideas. Tiny in number but growing in number by the day, we Austrianists (I count myself a very junior member of this team – a fan rather than any sort of player) truly believe that we are right about how the world works, and about how it could eventually be made to work a lot better. This is why we are winning.

By winning, I don’t just mean convincing of our rightness third parties with no stake in how things are being done now and no power to make any difference, although that also will happen, in the fullness of time. I mean making our now hugely powerful opponents (powerful in the sense of having the power to go on doing huge damage) realise that they themselves are entirely wrong, and that we Austrianists, who until recently they had never even heard of, are right. I mean especially them. The bewildered onlooker tendency, vastly more numerous than any of the intellectual teams directly involved in this debate, is likely to remain confused about all this for a much longer time. They’ll only hear about this argument after we have won it. But the powerful people who presided over this long catastrophe, and who made and continue to make it ever worse with their ever more panic-stricken decisions, are mostly going to emerge from the wreckage with no doubt in their minds that their Austrianist critics understood everything far better than they did. They may not admit it out loud, still less formally surrender, although there will probably be some very public changes of mind. But most of these people will know in the privacy of their own minds that they were utterly defeated, by events, and by those who proved with their prophecies, observations and post mortems, that they understood these events, as they did not begin to until it was far too late.

It was like this with that earlier collapse of statist power, the fall of the USSR. The people who presided over that collapse had no doubt concerning the inferiority of their own economic arrangements, which was a big part of why those arrangements collapsed. It wasn’t merely that Soviet communism collapsed because it was hopeless. It collapsed because the Soviet communists who ran Soviet communism themselves came to realise that Soviet communism was hopeless.

Perhaps this is why Gordon Kerr talks so quietly. He is right. He knows he is right. He feels no need to shout.

Allow me also to remind you about Jamie Whyte‘s recent radio performance. He also spoke with utter certainty in the rightness of what he was saying, and he never once felt the need to raise his voice either.

LATER: Steve Baker MP comments.