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George Orwell, Economic Illiterate By: Rafe Champion
ConservativeNet | Thursday, July 03, 2003


As we celebrate the anniversary of one of the most honest and courageous men of the 20th century it is important to temper our praise with the recognition that he had a very serious limitation. He was an economic illiterate. In company with many other intelligent anti-totalitarians of his time, like Bertrand Russell (to the age of 90) and Leonard Woolf, he called himself a socialist. In their eyes, all that could be expected of "unfettered competition" were boom and bust cycles, monopolies, exploitation of the workers and unemployment. (In fairness to Bertrand Russell, his first serious engagement in politics was to defend free trade from opponents in the British Liberal Party, circa 1905.)

 This is  Orwell's comment on Hayek's "The Road to Serfdom":

"Professor Hayek is probably right in saying that in this country the intellectuals are more totalitarian minded than the common people. But he does not see, or will not admit, that a return to 'free' competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them. Professor Hayek denies that free capitalism necessarily leads to monopoly but in practice that is where it has led, and since the vast majority of people would far rather have State regimentation than slumps and unemployment, the drift towards collectivism is bound to continue if popular opinion has any say in the matter."

Orwell's criticism of  free trade under the rule of  law is pure nonsense. It is not made into sense by the fact the it simply reflects the way the majority of intellectuals have thought for 200 years. Economic competition in the marketplace is not a battle between employers and workers, it is a battle for the consumer's dollar. The winner is the consumer, as demonstrated by the price and quality of cars in Australia under partial reduction of tariff protection.  Can someone point to a monoply that is not created or protected by the State? Can someone nominate a country where there was unfettered free trade during the 1930s?

We can learn a lot from George Orwell, or at least the fellow travellers with the Soviet Union could have learned a lot, but we do not learn anything about markets and free trade. We learn, yet again, about the harm that is done by good men who are not prepared to keep on learning, to revise their ideas, to challenge the prejudices of their generation. Tragically, it was not until the 1970s that the free trade movement in Australia gained a public profile. It was only in the 1970s that the almost forgotten Austrian School of economics staged a revival.

Left-leaning intellectuals who like to think that they are the heirs of Orwell's legacy may be correct, but if they want to be part of the solution to the problems of freedom and dignity in the third millenium they had better escape from Orwell's flat-earth economics.

For a corrective, consider the contribution of W H Hutt.




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