Saturday, November 19, 2011

Real Free Market Capitalists Demand that Financial Fraud Be Prosecuted

Washington’s Blog
November 18, 2011

Adam Smith, Leading Austrian Economists and Other Free Market Advocates Are For the Prosecution of Fraud

There is a widespread myth that free market supporters are against regulation or prosecuting fraud.

In fact, Adam Smith – the father of free market capitalism – was for regulation of banks, and believed that trust is vital for a healthy economy. Because strong enforcement of laws against fraud is a basic prerequisite for trust, Smith would be disgusted by the lack of prosecution of Wall Street fraudsters today.

Smith railed against monopolies and their corrupting influence. And Smith was pro-regulation, so long as the regulation benefited the little guy, as opposed to the wealthiest:

When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.

Richard Posner – one of the leading proponents over the course of many decades for removing the reach of the law from the economy – has now changed his mind.

So has another leading proponent of deregulation and turning a blind eye toward s fraud: Alan Greenspan.

While some promoters of a fake version of Austrian economics are anti-regulation and against prosecuting fraud, the main Austrian economists were unambiguously for them.

Continue reading here: http://www.washingtonsblog.com/2011/11/real-free-market-capitalists-demand-that-financial-fraud-be-prosecuted.html

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