Murray Rothbard addressed the strange greed-causes-the-business-cycle “theory” in several places, always with the same straightforward question: Why should we believe that greed waxes and wanes in rhythm with booms and busts? You can’t take a constant human vice (assuming you can define greed precisely and consistently enough to call it a human vice) and use it to explain anything cyclical.

What’s frustrating about so many of these (generally left-wing) accounts of the “ugly engine of capitalism” is that they are not entirely wrong — not even mostly wrong. In fact, they’re mostly right, except for the all-important fact that a vague and emotional concept of “capitalism” (or even “the free market”) is blamed for the ill effects of the very same politically privileged system that advocates of free-market capitalism so strongly oppose.

To quote Tom DiLorenzo again, leftists are “constitutionally unable to distinguish between free enterprise and special privilege” (How Capitalism Saved America, p. 45).


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