Collection of Myths and Fallacies of Laissez-Faire Capitalism

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Peter Simon Christensen Posted: Fri, Dec 30 2011 8:39 PM

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Hello everyone,

I was hoping for you to contribute with every fallacy and myth that you know of as to laissez-faire capitalism. And after this, I was hoping that you could provide a refutation of this fallacy/myth; either via books, essays, videos, podcasts, etc.

It would be valuable to all; not only me.

I feel as if I have been scouting the whole Internet. If a thread or page of these already exists, please feel free to post the link and end this thread.

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Wheylous replied on Fri, Dec 30 2011 8:49 PM

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Well, given that this whole forum is devoted to just that... I think your best option is to simply stick around long enough and check out new threads. I am planning on doing something of an Austrian/AnCap FAQ sometime in the future...

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AJ replied on Fri, Dec 30 2011 8:51 PM

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Some great short videos here: http://www.youtube.com/user/LearnLiberty (price controls, "we are running out of resources," Broken Window Fallacy, "the poor are getting poorer," etc.)

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AJ replied on Fri, Dec 30 2011 8:55 PM

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Keep in mind also that praxeology is basically one big system of myth-busting by forcing people to keep their eye on the ball (the acting agent). Each chapter in Economics in One Lesson (PDF link) is also a myth exploding exercise:

• The Broken Window
• The Blessings of Destruction
• Public Works Mean Taxes
• Taxes Discourage Production
• Credit Diverts Production
• The Curse of Machinery
• Spread-the-Work Schemes
• Disbanding Troops and Bureaucrats
• The Fetish of Full Employment
• Who's "Protected" by Tariffs?
• The Drive for Exports
• "Parity" Prices
• Saving the X Industry
• How the Price System Works
• "Stabilizing" Commodities
• Government Price-Fixing
• What Rent Control Does
• Minimum Wage Laws
• Do Unions Really Raise Wages?
• "Enough to Buy Back the Product"
• The Function of Profits
• The Mirage of Inflation
• The Assault on Savings

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John James replied on Mon, Jan 2 2012 1:06 PM

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There's quite a bit at the Mises Wiki in the form of "argumentation" pages for specific subjects.  Those listed might help, but you also might consider starting a new one yourself!

http://wiki.mises.org/wiki/Category:Argumentation

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Clayton replied on Mon, Jan 2 2012 3:35 PM

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Thomas Sowell: Economic Facts and Fallacies

Here's a list of falsities and fallacies I recently made in another thread:

• The free market tends to monopolies
• The free market always favors "economy of scale", that is, bigger is always cheaper and more economical than smaller
• Larger capital value enables a larger business to "bully" a smaller one irrespective of government favors
• Big businesses can always "undercut" smaller competitors by virtue of their size
• Big businesses are pro-free market and welcome vigorous competition irrespective of government favors
• Most new businesses are a good idea and would be profitable but for intereference from large, established competitors
• Regulatory compliance is a minor burden for small businesses but causes severe consternation among large, established competitors
• Government is not particularly interested in generating larger absolute tax revenues
• Government is more worried about pissing off "the people" than about pissing off large, powerful lobbies

Some other big ones include:

• Taxation can be targeted to primarily affect specific economic groups
• The richest pay the most in taxes under progressive tax systems
• Government and big business are generally in contention with one another
• The "free" in free market is different than the "free" in free speech
• There are certain classes of goods demanded by consumers which, by their very nature, cannot be produced without government
• Laws regulating economic activity (most laws) are motivated by concerns about establishing "justice", not simply to promote the interests of the law's lobbyists and suppress the interests of outsiders
• Government regulators are primarily motivated by a concern for the public good

I can't think of any others off the top of my head. If you want specific reasons for why any particular fallacies are incorrect, just ask.

Clayton -

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Peter Simon Christensen replied on Mon, Jan 2 2012 5:10 PM

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Thanks a lot for your contributions! I appreciate it, and I am glad that so many were willing to help.

The reason as to why I wanted these was due to a new project of mine; making some sort of FAQ/guide to laissez-faire in my native language. I see no one is around and so I wanted to debunk some of these. Once again, many thanks!