We can argue about what rules and regulations are required to protect Americans from excesses, but you can’t deny that people are contributing to our economy by turning ideas into businesses in the private sector — just look at Bill Gates. (I know, I know, public investment in technology, especially by the defense department, has played a major role — I’m just saying entrepreneurs also deserve some credit for providing jobs, our standard of living, etc.)

So when you say there is no free market, or when you say negative things about the free market (i.e. “it’s a disaster”) — that WILL be misinterpreted by some people to mean that you think the government should just run everything, as in the “centrally planned command economy” Lee refers to.

Now may be that once-in-a-lifetime moment in American history when most Americans are prepared to swallow major changes in the way government manages the economy. I just hope we don’t blow the opportunity by using language that may be technically accurate but can be easily misunderstood.

Then again, the ideal of the free market is easy enough to describe and easy enough to find historical examples of, if not through an entire economy then through certain sectors of it. No pure free market exists, but a market that is allowed to do what it wants absent regulation (apart from the enforcement of contracts) is more “free” according to the standard definitions than one where government shapes the behavior of the market.

Which is to say, there is often a policy option between “more freedom” and “more regulation,” less intervention and more intervention. I am arguing that “more freedom,” as defined by your run-of-the-mill libertarian, has historically — and for those interested, also theoretically — been a disaster. Times where the US economy has approximated something like a free market have been totally disastrous for the people. Our current financial meltdown is arguably the result of “too much freedom” in the markets.

Democrats should always choose the way of smart, efficient regulation, reflective of democratic consensus and consonant with our enumerated rights. Republicans should, too, if they care about the economic welfare of the American people.

I agree with the principal of this but, I’d like to make the case that there is no actual notion of a free market. Or what is usually referred to as the ‘free market’ isn’t actually a free market. After all, where does that notion begin? Is it a natural phenomena like gravity? What is the purest free market of all? Wouldn’t it be no rules, no regulations at all?

It seems to me, what we call the ‘free market,’ is actually a huge, complicated, construction of rules, laws, mores, etc. spanning the course of human history.

And there are tremendous laws, regulations, infrastructure, etc. put into place, over time, which compose the marketplace of today. The idea that the ‘free market’ is this magical efficiency apparatus seems like a chimera. To me, it’s clearly a construction.

So when people talk about the ‘free market’ it seems to me that they’re really talking about a complicated arrangement rules, regulations, etc. for competing to produce/sell something. And the idea that, ‘if we just get out of the way of the free market, it will work it’s magic’ is utterly delusional. All you’re really talking about is a system of competition, which upon closer and closer inspection is unbelievably regulated, legislated, constrained and defined.

So when people talk about a ‘free market’ they’re just talking about a different arrangement for competition that has nothing to do with a market being ‘free’ – ‘free market’ is just a convenient buzzword.

Now, the idea that additional rules somehow inherently stifle or kill competition seems similarly naive. Sure, they could but, they could also keep it healthy and stable. And I think the trend over the last 30 years has been to consciously deny American Economic History. In point of fact, the US economy after the civil war was one boom-bust cycle after another (just search on ‘panic of’ in wikipedia and you’ll see what I’m referring to). Establishment of the federal reserve ended this cycle. Indeed, the increased regulation during the first half of the 20th century, laid the ground for the largest economic expansion in our history. So, Imposing regulations to cap foolish risk taking is a Good Thing, not just for the economy but, for society. I would even go so far to say that the idea that we would ’stifle innovation’ now by imposing regulations that force caps on foolish risk takers, is historically false.

This is all rather inchoate in my mind and this was a stab at trying to organize my thoughts – sorry if it’s too abstract or senseless.

Big business does not care about the size of government, and big business is happy to accept government intervention if it saves big business’ ass. All big business wants is lower taxes to fuel short-term profits and share value.

Big business may supply the money that fuels the Republican Party, but middle class Americans supply the votes — and the confounding way a good number of these folks seem to shift back and forth suggests they are either “low-information” voters, or else they care about issues other than the candidates’ policy proposals.

Maybe this crisis will have an impact in terms of convincing these people that Republican policies aren’t serving their interests…