Soros on market fundamentalism

George Soros picked up the idea of  the open society from Karl Popper at the London School of  Economics and he spent a great deal of money promoting the idea through Open Society Institutes in Eastern Europe.

Lately he has moved on to target market fundamantalism as the great threat to human welfare and he is backing this with real money to set up another Institute to address the  issue. This is  the text of one of his talks in a recent series delivered in Budapest.

I define market fundamentalism as the undue extension of market values to other spheres of social life, notably politics. Economic theory claims that in conditions of general equilibrium, the invisible hand assures the optimum allocation of resources. This means that people pursuing their self-interest are indirectly also serving the public interest. It gives self-interest and the profit motive a moral imprimatur which allows them to replace virtues like honesty, integrity, and concern for others.

I have got a problem with the way that so-called market fundamentalism is depicted by critics like Soros and Kevin Rudd. I think they have not laid a glove on classical liberalism which includes a moral framework and a legal framework as well to limit the damage that people may do if they have no regard to the consequences of their actions.

As for the decline of  public morality which Soros attributes to the rise of market fundamantalism, this can just we well be attributed to the rise of Big Government, plus  the kind of conservatism that Hayek deplored in his famous  piece “Why I am not a conservative”, add the welfare state mentality (and the unhelpful concept of social justice) and the activities of the radical adversary culture.

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