Laissez-faire capitalism appears in these excerpts less as a settled doctrine than as a position under argument — defended by some speakers as the logic of the free market, and described by others as something that was rejected by influential institutions from the nineteenth century onward.
Free markets distinguished from business
In a discussion of crony capitalism, Bob Zadek draws a distinction between business and free markets, saying the two are not co-extensive terms. He argues that many American businesses would prefer there not be a free market, and would be content with an unfree market so long as they prospered, seeking to eliminate competition through government tools or otherwise. For Zadek, the home of laissez-faire capitalism resides for the most part in small business, which competes in the crucible of the free market, whereas businesses such as GE would be content with a totally unfree market. He sums up the difference as one between businessmen and free marketeers Obama Nationalizes General Electric (2011).
Zadek extends the point to the blurring of lines between the job of government and the job of business, which he says makes Americans suffer. He objects to built-in social costs in the price of products, arguing that business should not per se be doing good in the world and that government cannot force that role upon American business. He quotes President Obama addressing the U.S. Chamber of Commerce — the trade association of American mostly big business — as saying, “Ask yourself what you can do for America. Ask yourself what you can do to hire American workers, to support the American economy, and invest in this nation.” Zadek responds that the job of American business is to create jobs, create wealth, and use capital effectively, not to carry on lofty social goals Obama Nationalizes General Electric (2011).
Guest Luigi Zingales agrees, saying the larger the role for government and the more scope there is for business to direct government resources in its favor, the worse the situation is. Zadek adds that a business’s power in a marketplace tends to be transitory, citing railroads as all-powerful until there were planes and trucks, while the power of government seems far more permanent Obama Nationalizes General Electric (2011).
The philosophical rejection of laissez-faire
C. Bradley Thompson, discussing his book America’s Revolutionary Mind: A Moral History of the American Revolution and the Declaration That Defined It, tells Bob Zadek that the rejection of the principles of the Declaration of Independence began in the 1830s, when the ideas of European, particularly German, philosophers were brought to America. He says the ideas of the German nineteenth-century philosopher Hegel were initially brought to the United States by a Southerner, by a pro-slavery Southerner in the 1830s C. Bradley Thompson on America’s Revolutionary Mind (2019).
Thompson describes pro-slavery intellectuals during the antebellum period as America’s first great advocates of this German philosophy, which he says rejected right down the line all of the principles of the Declaration of Independence. He says they rejected the idea of an absolute, certain, permanent, universal truth and accepted the ideas of socialism. He calls it one of the truly great ironies in American history that pro-slavery defenders like George Fitzhugh defended the peculiar institution on the grounds that it was, in Thompson’s quotation of the phrase, “the beau ideal of communism.” Thompson says the first pre-Marxian Marxists in America were pro-slavery writers, and that they were trenchant critics of limited government and of free market or laissez-faire capitalism C. Bradley Thompson on America’s Revolutionary Mind (2019).
Thompson continues that in the post-Civil War period a generation of American graduate students and intellectuals received their graduate training at European and more particularly German universities, producing what he calls a philosophic tsunami that crashed upon American shores beginning in the 1870s, bringing in the ideas of Hegel, of Karl Marx, of Friedrich Nietzsche. In one generation, he says, they transformed America’s universities, and that is when the strongest critique of not just the principles of the Declaration of Independence but of the Constitution emerges. He names Woodrow Wilson as attacking the principles of both the Declaration and the Constitution, and says that in place of the idea of a limited night-watchman government, they imported the ideas of German statecraft, of the Prussian state, producing the first big movement in American intellectual and political life for the creation of a statist government C. Bradley Thompson on America’s Revolutionary Mind (2019).
Economists and the founding of a profession
Thomas DiLorenzo, discussing his book The Politically Incorrect Guide to Economics, tells Bob Zadek that political correctness infected economics from the very beginning, and that a lot of academic economists have always been essentially propagandists for the state first and foremost. He cites Doug Casey, the well-known Wall Street investor, who in an article called most economists seen on TV or writing for the New York Times “economic witch doctors.” DiLorenzo says he was an economics professor for 41 years Lies, Damned Lies & the Inflation Reduction Act (2022).
DiLorenzo states that even the American Economic Association, the trade association of academic economists, when it was created in the 1880s, had a founding document that condemned laissez-faire capitalism as unsound in morals and unsafe in practice. He says it called for more government intervention and wanted to tie government intervention to the church, to religion, apparently wanting to make people think that government intervention and some version of socialism was God’s will Lies, Damned Lies & the Inflation Reduction Act (2022).
Against this, DiLorenzo says there always was a remnant of free-market economists associated with the Austrian School of economics and later the so-called Chicago School. He also names the Public Choice school, which he says uses economics to analyze political decision-making, and notes that James Buchanan, who won the Nobel Prize, was a professor of his. DiLorenzo describes a whole big theory of government failure attached to Public Choice, and says his book discusses these schools of thought, which he calls a remnant of free-market, libertarian-oriented economists, and goes over myths created over the years by interventionist economists Lies, Damned Lies & the Inflation Reduction Act (2022).
Across episodes
The three episodes approach laissez-faire from different angles rather than developing a single argument: the 2011 episode treats it as a market condition threatened by the marriage of business and government, the 2019 episode treats its rejection as an intellectual history beginning in the 1830s and accelerating in the 1870s, and the 2022 episode treats the economics profession’s founding as hostile to it from the start. No excerpt responds directly to another, and the excerpts show no development of a shared question across the episodes.
What the sources do not cover
The excerpts do not define laissez-faire capitalism in systematic terms, nor do they trace any policy or legal outcome attributed to it. They do not describe the American Economic Association’s founding document beyond DiLorenzo’s characterization, and they do not identify the article by Doug Casey beyond DiLorenzo’s reference. The Thompson excerpt ends mid-discussion, and the DiLorenzo excerpt breaks off after Bob Zadek’s name, so neither the full argument nor the exchange that follows is available here.