Wall Street Journal Smears Free Market Economists

The Journal's editorials usually contain savvy insights into the various issues. One notable exception concerns illegal immigration, for which they are completely clueless.

Their news articles, however, are written by journalists drawn from the same pool as those who work at leftist rags such as the New York Times and Washington Post, with predictable results. In an article published last Tuesday, Joel Millmand and Roger Thurow take a cheap shot at free market economists, even though these economists are advocating policies that are abviously not free market:

For decades, poor nations were discouraged from investing too much in agriculture, which was seen as a problem rather than a solution to fighting poverty. Many free-market economists came to believe that the reason billions of people are poor is because they are shackled to subsistence farming. The economists' solution: find something else for them in manufacturing, tourism or services so that they can make money to buy food instead of growing it.
Poor countries were discouraged from growing much of their own staples, such as rice and wheat, that are usually grown more cheaply in rich countries. Instead, they were told to focus on export crops that might fetch a higher price.
Now, with grain stocks depleted, China and India gobbling food as never before and food prices soaring, many poor countries are turning their back on the old ideas and installing government programs designed to support local farmers. These include cash subsidies to poor consumers, increased efforts to improve local seed varieties, and government-sponsored handouts of fertilizer and seeds.

The food crisis has also contributed to a major rethink among the advice givers. Institutions such as the World Bank and International Monetary Fund are once again treating investment in poor farmers as a promising development strategy. Last week in Rome, World Bank President Robert Zoellick told an emergency United Nations summit on the food crisis that boosting developing country agriculture productivity and reducing hunger were top priorities for the bank.

Urged to redirect spending from local farming to areas like assembling underwear for export, Haiti's successive governments rarely spent as much as 3% of the country's annual economic output on food production, says the former agriculture minister, Mr. Mathieu.

Free market economists do not advise governments to subsidize or interfere in commerce in any way whatsoever. We advise them to keep taxes and government spending low and to restrict government involvement to such matters as enforcing contracts and prosecuting criminals.

I don't know where Millmand and Thurow get the idea that economists at the World Bank and IMF promote free market policies. The people I have known who have worked at these institutions have been some of the most anti-free market economists of all. Furthermore, even though the World Bank is headquartered in the USA and largely bankrolled by American taxpayers, they refuse to hire any American-born economists.

This entire situation is yet another example of how socialists foul up the economy and then blame the results on "free market" policies.