My Heroes Have Always Been Killjoys

Matt Welch has replied ably to Jacob Weisberg's latest sneer at libertarianism. I have just one point to add, about this passage near the end of Weisberg's piece:

The worst thing you can say about libertarians is that they are intellectually immature, frozen in the worldview many of them absorbed from reading Ayn Rand novels in high school. Like other ideologues, libertarians react to the world's failing to conform to their model by asking where the world went wrong. Their heroic view of capitalism makes it difficult for them to accept that markets can be irrational, misunderstand risk, and misallocate resources or that financial systems without vigorous government oversight and the capacity for pragmatic intervention constitute a recipe for disaster.

The "heroic" view of capitalism may well be popular among high school Randites. But what serious adult libertarian, whether or not he went through a Rand phase, argues that markets run on heroism? We argue that markets are a discovery process filled with trial and error; that businesses misunderstand risks and misallocate resources all the time, and that this is why we need market discipline to keep them in line. Instead of that discipline, during the lead-up to the current crisis, they received first a gushing river of subsidized credit and then a series of bailouts.

When you don't believe in the heroic corporate chieftain, it should be equally hard to put your faith in that alternative fantasy, the heroic regulator: neutral and public-spirited, always attuned to market failure, constantly prepared to right the ship of commerce. Instead we favor a decentralized system of checks and balances, of which the most important are the checks imposed by an open, competitive marketplace. Not because it's heroic, but because it can ruthlessly cut a would-be hero down to size.