If neither the typical economist nor Milton Friedman himself qualify as market fundamentalists, who does? The only plausible candidates are the followers of Ludwig von Mises and especially his student Murray Rothbard. The latter does seem to categorically reject the notion of suboptimal market performance...
Both Mises and Rothbard have passed away, but their outlook — including Ph.D.s who subscribe to it — lives on in the Ludwig von Mises Institute. The closest thing to market fundamentalists are not merely outside the mainstream of the economics profession. They are way outside.
Everytime I re-read this passage in various drafts of The Myth of the Rational Voter, a little voice in my head told me: "Walter Block is going to read this and he'll be outraged." News flash: he did and he was. Here's Block's review, and this is what he says about the offending paragraphs:
Let me confess at this point that I too am a "market fundamentalist" as least insofar as support for this contention of Rothbard is concerned. What Rothbard says makes complete sense...
Yes, Austrians have indeed "given up" on the views of mainstream economists. These are rejected as erroneous, when they depart from praxeological insights. But we most certainly have not "given up" on mainstream economists themselves, Caplan specifically included, as he full well knows, as he has been embroiled in a back and forth debate for almost a decade now, where we have been trying to convince him of the error of his ways.
Frankly, I'm puzzled. As far as I can tell, I say that Rothbardians are market fundamentalists who have given up on mainstream economics, and Block replies "Market fundamentalism is true, and mainstream economics is a waste of time." As Homer says, "If we agree, why are we arguing?"
Block spends a lot of time criticizing my deviations from Austrian economics; since we've already debated these issues at length (see here for the last word in the exchange), I'm not going to say any more. But Block is on newer ground when he criticizes me for numerous libertarian deviations.
For the most part, Block is unhappy that I fail to defend radical libertarian positions. My response is that doing so would be a massive distraction from the main thesis of the book. Block also points out a number of passages where I seem to endorse unlibertarian positions. Example:
[Caplan] errs by classifying opposition to tradable rights (TERs) as an instance of anti-market bias. Not so. Rather, TERs are akin to tradable rape or murder rights. Pollution is necessarily an invasion or violation of property rights. It constitutes a trespass of smoke and dust particles emanating from the aggressor to the lungs or land of another person. As such, there is not and cannot be a "right" to do so. Just because TERs "get you more pollution abatement for the same cost" does not gainsay this fact.
But I see no problem with this passage. Libertarians can argue about whether TERs are comparable to a "right to rape." But clearly the reason why most people oppose TERs is that they underestimate the ability of a market in pollution to improve air quality at a low cost.
Overall, though, I'd say that Block, like virtually every other reviewer, has fairly summarized my views. In fact, if you put more weight on the creation of original, important, true ideas than on doctrinal purity, then Block has written a rave review. After all, once a reviewer says
Caplan brings something truly unique to the table. It would be one thing if economists had been silent on this issue of irrational, biased and ideologically intent voters. Worse, virtually all of them have been wrong with regard to it, dead wrong. Caplan speaks no truer words when he says: "If I am right, then a good deal of published research (on this matter) is wrong." Most members of the economics profession have been modeling what the average citizen does in the ballot booth along the lines of how he acts at the check-out counter. But, says Caplan, "the analogy between voting and shopping is false. Democracy is a commons, not a market." Even had this author’s insight that voters indulge their personal biases not been new it would still have been valuable. But this book constitutes a fresh look at the matter, and that makes it even the more precious.