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Well, I think we must be careful about how we use the term "laissez faire". In Austrian circles (speaking from experience) the term seems to denote the exclusive alternative to central planning. Interventionism is treated as an ephemeral phenomenon that quickly slides to one of the two extremes.

But this battle is over. One no longer has to argue that free markets perform better than centrally planned economies. In the words of Karen Vaughn, "[this] is now a given". It would seem now that the real question concerns the appropriate balance between markets and government. This shift of focus clearly brings to light the central importance of interventionism. What constitutes an act of intervention. How destabilizing is interventionism? How does it compare to the destablilzing forces of laissez faire? To command economies?

Matthew, it might help to keep in mind the distinction between rules and orders that Popper expounded, following Hayek

"We thus arrive at a distinction between two entirely different methods by which the economic intervention of the state may proceed. The first is that of designing a ‘legal framework’ of protective institutions (laws restricting the powers of the owner of an animal, or of a landowner, are an example). The second is that of empowering organs of the state to act - within certain limits - as they consider necessary for achieving the ends laid down by the rulers for the time being. We may describe the first procedure as ‘institutional’ or ‘indirect’ intervention, and the second as ‘personal’ or ‘direct’ intervention."

The Austrians and fellow travellers have for some time been looking very hard at the political and institutional context and the way that this bears on the decisions that people make in the marketplace. To move in the direction that we consider to be desirable, the state will have to "intervene" to re-write some of the rules, mostly in the direction of less rules (and less spending). You could say that the only honourable reason for being in politics these days is to roll back the state.

That kind of intervention (by changing the rules) is quite different from interventions that involve orders and directions, or favours for special interests.

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