According to John Hasnas: if people choose to look around instead of blindy accepting the idea that government is necessary, very obvious. Of course it isn’t obvious to see for yourself when just about everyone will tell you that you shouldn’t. Even classical liberals generally don’t. Tom Paine, for instance, said that government was a necessary evil. Evil, to be sure, but still necessary.  That must be obvious. But it isn’t. So first this reminder:

Yu-li-zi says, "Some men in the world rule their people by tricks and not by righteous principles. (...) They are not aware of their muddleheadedness. As soon as their people become enlightened, their tricks no longer work."

Let’s become enlightened then. First, we don’t need government to create laws:

Those of us residing in the United States or any of the British Commonwealth countries live under an extremely sophisticated and subtle scheme of rules, very few of which were created by government. Since almost none of the rules that bring peace and order to our existence were created by government, little argument should be required to establish that government is not necessary to create such rules. On the contrary, it is precisely the rules that were created by government that tend to undermine peace and order.

(...)

English common law is, in fact, case-generated law; that is, law that spontaneously evolves from the settlement of actual disputes. Almost all of the law that provides the infrastructure of our contemporary society was created in this way. Tort law, which provides protection against personal injury; property law, which demarcates property rights; contract law, which provides the grounding for exchange; commercial law, which facilitates complex business transactions; and even criminal law, which punishes harmful behavior, all arose through this evolutionary process. It is true that most of our current law exists in the form of statutes. This is   because much of the common law has been codified through legislation. But the fact that politicians recognized the wisdom of the common law by enacting it into statutes, hardly proves that government is necessary to create rules of law. Indeed, it proves precisely the opposite.

English law provides a nice illustration of how law evolves when not preempted by government. When people live together in society, disputes inevitably arise. There are only two ways to resolve these disputes; violently or peacefully. Because violence has high costs and produces unpredictable results, human beings naturally seek peaceful alternatives. The most obvious such alternative is negotiation. Hence, in Anglo-Saxon times, the practice arose of holding violent self-redress in abeyance while attempts were made to reach a negotiated settlement. This was done by bringing the dispute before the communal public assembly, the moot, whose members, much like present-day mediators, attempted to facilitate an accommodation that the opposing parties found acceptable. When reached, such accommodations resolved the dispute in a way that preserved the peace of the community.

The virtue of settling disputes in this way was that the moot had an institutional memory. When parties brought a dispute before the moot that was similar to ones that had been resolved in the past, someone would remember the previous efforts at settlement. Accommodations that had failed in the past would not be repeated; those that had succeeded would be. Because the moot was a public forum, the repetition of successful methods of composing disputes gave rise to expectations in the community as to what the moot would recommend in the future, which in turn gave the members of the community advance notice of how they must behave. As the members of the community conformed their behavior to these expectations and took them into consideration in the process of negotiating subsequent accommodations, rules of behavior gradually evolved.

This, in turn, allowed for the transformation of the dispute settlement procedure from one dominated by negotiation to one consisting primarily in the application of rules. The repetition of this process over time eventually produced an extensive body of customary law that forms the basis of English common law.

(...)

This example shows how the common law creates the rules necessary for a peaceful society with minimal infringement upon individual freedom. Law that arises from the settlement of actual conflicts, settles conflicts. It does not create a mechanism for social control. Common law is law that is created by non-political forces. As such, it can give us rules that establish property   rights, ground the power to make contracts, and create the duty to exercise reasonable care not to injure our fellows, but not those that impose a state religion, segregate races, prohibit consensual sexual activity, or force people to sell their homes to developers. Only government legislation, which is law that is consciously created by whatever constitutes the politically dominant interest, can give us rules that restrict the freedom of some to advance the interests or personal beliefs of others.

The unenacted common law provides us with rules that facilitate peace and cooperative activities. Government legislation provides us with rules that facilitate the exploitation of the politically powerless by the politically dominant. The former bring order to society; the latter tend to produce strife. Hence, not only is government not necessary to create the basic rules of social order, it is precisely the rules that the government does create that tend to undermine that order.

Government. Evil. Not necessary. But isn’t government necessary to create uniform laws. No:

Why would anyone think that uniformity in law is any more desirable than uniformity in dress? The quest for uniformity leads us to treat the loving husband who kills his terminally ill wife to relieve her suffering the same way we treat Charles Manson, to apply the same rules of contracting to sophisticated business executives purchasing corporations and semi-literate consumers entering into installment contracts, and to act as though the slum lord in the Bronx and the family letting their spare room in Utica should be governed by the same rules of property law.

There are, of course, certain rules that must apply to all people; those that provide the basic conditions that make cooperative behavior possible. Thus, rules prohibiting murder, assault, theft, and other forms of coercion must be equally binding on all members of a society. But we hardly need government to ensure that this is the case. These rules always evolve first in any community; you would not even have a community if this were not the case.

The idea that we need government to ensure a uniform rule of law is especially crazy in the United States, in which the federal structure of the state and national governments is designed to permit legal diversity. To the extent that the law of the United States can claim any superiority to that produced by other nations, it is at least partially due the fact that it was generated by the common law process in the “laboratory of the states.”8 Allowing the development of different rules in different states teaches us which rules most effectively resolve disputes. To the extent that the conditions that give rise to disputes are the same across the country, the successful rules tend to be copied by other jurisdictions and spread. This creates a fairly uniform body of law. To the extent that the conditions that give rise to disputes are peculiar to a particular location or milieu, they do not spread. This creates a patchwork of rules that are useful where applied, but would be irrelevant or disruptive if applied in other settings.

One of the beauties of the common law process is that it creates a body of law that is uniform where uniformity is useful and diverse where it is not. This is the optimal outcome. Government legislation, in contrast, creates uniformity by imposing ill-fitting, one-size-fits-all rules upon a geographically and ethnically diverse population. Once again, not only is government not necessary to the creation of a well-functioning body of law, it is a significant impediment to it. Please consider this the next time you find yourself wondering why all businesses must be closed on Sunday in the Orthodox Jewish sections of Brooklyn.

Government. Evil. Not necessary. Still, some would argue that government has to make laws so that the law can be available to all people. Again, wrong:

The common law consists of rules that have proven over time to be successful in resolving disputes. Only rules that are both intelligible to the ordinary person and correspond to the ordinary person’s sense of fairness can achieve this status. Rules which are inaccessible to those to be governed by them cannot be effective. This is why, for example, the common law rules of contract and commercial law specifically incorporate references to customary business practice and the duty to act in good faith. It is also why no legal expertise is required to know that the law of self-defense permits one to use deadly force to repel a life-threatening attack, but not to shoot the aggressor after the immediate danger has passed. Understanding the traditional rules of common law requires only that one be a member of the relevant community to which the rules apply, not that one be an attorney.

Government legislation, in contrast, need have no relationship to either the understanding or the moral sensibility of the ordinary person. Legislation is law created through the political  process. As such, it is inherently responsive to political considerations. Such considerations can, and frequently do, produce rules that are not intelligible to the ordinary person. This is not merely because special interests can skew the legislative process. Even if legislators were selflessly devoted to the common good, they would still need some principle of justice or moral ideal to guide their law-making. But there is no guarantee that the measures necessary to effectuate such principles or ideals will correspond to the understanding of the ordinary person. The Civil Rights Act of 1964 may have been the noblest legislative effort of our age, but the ordinary person is unlikely to understand why requiring pizza delivery men to be clean shaven constitutes illegal racial discrimination10 or how a company with a work force consisting of almost all minorities can nevertheless be guilty of discrimination

Government. Evil. Not necessary. Ok, not for laws, but we need the government to speak justice:

This is the age of globalization. Business is contracted around the world among parties from virtually all countries. Although there is neither a world government nor world court, businesses do not go to war with each other over contract disputes. News is almost always the news of violent conflict. The very lack of reporting on international business disputes is evidence that international commercial disputes are effectively resolved without the government provision of courts. How can this be?

The answer is simplicity itself. The parties to international transactions select, usually in advance, the dispute settlement mechanism they prefer from among the many options available to them. Few choose trial by combat. It is too expensive and unpredictable. Many elect to submit their disputes to the London Commercial Court, a British court known for the commercial expertise of its judges and its speedy resolution of cases that non-British parties may use for a fee. Others subscribe to companies such as JAMS/Endispute or the American Arbitration Association that provide mediation and arbitration services. Most do whatever they can to avoid becoming enmeshed in the coils of the courts provided by the federal and state governments of the United States, which move at a glacial pace and provide relatively unpredictable results. The evidence suggests that international commercial law not only functions quite well without government courts, it functions better because of their absence.

(...)

Further, focusing on the competition among the common law courts misleadingly underestimates the diversity of the dispute settlement mechanisms that were actually employed. Because the cost of utilizing the common law courts was too great for the typical working man, those courts were virtually irrelevant to the majority of the population. Most citizens resolved their disputes according to informal, customary procedures that varied with the location (urban or rural) and class of those employing them. Since our present relatively non-violent, capitalistic society evolved in the context of a diverse and competitive system of courts and dispute settlement mechanisms, it cannot be the case that government provision of courts is necessary for peaceful settlement of disputes. In fact, a comparison of the amount of rancorous dissatisfaction produced by the contemporary government-supplied judiciary (consider the tort reform movement) with that associated with the more variegated traditional system of resolving disputes suggests that the government provision of courts reduces rather than augments social peace.

Government. Evil. Not necessary. Haaaa! But the police at least need to be run by the government! Otherwise we have the maffia. Oh, really?

(I)f civil society cannot exist without a government monopoly over the use of coercion, then civil society does not exist. Societies do not spring into existence complete with government police forces. Once a group of people has figured out how to reduce the level of interpersonal violence sufficiently to allow them to live together, entities that are recognizable as governments often develop and take over the policing function. Even a marauding band that imposes government on others through conquest must have first reduced internal strife sufficiently to allow it to organize itself for effective military operations. Both historically and logically, it is always peaceful coexistence first, government services second. If civil society is impossible without government police, then there are no civil societies.

(...)

The proper response to the claim that government must provide police services is: look around. I work at a University that supplies its own campus police force. On my drive in, I pass a privately operated armored car that transports currency and other valuable items for banks and businesses. When I go downtown, I enter buildings that are serviced by private security companies that require me to sign in before entering. I shop at malls and department stores patrolled by their own private guards. While in the mall, I occasionally browse in theSecurity Zone store that sells personal and home protection equipment. I converse with attorneys and, once in a while with a disgruntled spouse or worried parent, who employ private detective agencies to perform investigations for them. I write books about how the United States Federal government coerces private corporations into performing criminal investigations for it.  When I was younger, I frequented nightclubs and bars that employed “bouncers.” Although it has never happened to me personally, I know people who have been contacted by private debt collection agencies or have been visited by repo men. Once in a while, I meet people who are almost as  important as rock stars and travel with their own bodyguards. At the end of the day, I return home to my community that has its own neighborhood watch. I may be missing something, but I haven’t noticed any of these agencies engaging in acts of violent aggression to eliminate their competitors.

Ah, but that is because the government police force is in the background making sure that none of these private agencies step out of line, the supporters of government contend. Really? How does that explain London before the Bow Street Runners? The New York City police force was not created until 1845. The Boston Police Department, which describes itself as “the first paid, professional public safety department in the country”25 traces its history back only to 1838. What kept the non-political police services in line before these dates?

Regardless of Hobbes’ and Locke’s philosophical musings, for most of English history, there was little government provision of police services. It is true that as the kings of England learned how to collect revenue by declaring all violence and sinful activity a breach of the King’s peace for which they were owed payment, they began to develop an administrative machinery to facilitate the collection of fines for “criminal” activity. Thus, the local representative of the Crown, the shire reeve (later sheriff), became tasked with reporting and eventually apprehending offenders. But since the sheriffs were only interested in pursuing offenders with the means to pay the amercement, this never represented a significant portion of the police activity within the realm. The customary, non-political methods of policing provided security for most of the population of  England until quite recently.

(...)

Traditionally, police services were not provided by government and, to a large extent, they still are not. Therefore, government is not necessary to provide police services.

(...)

(But) when police services are supplied by a politically-controlled monopoly, the public receives police services driven by political, rather than efficiency, considerations. Thus, disfavored, politically powerless groups are typically underserved, police resources are frequently directed toward politically favored ends (e.g., suppression of victimless crimes) rather than their most productive use (e.g., suppression of violence), and the nature of the service is determined by political budgetary concerns rather than actual need (...). Further, because government police are not dependant on voluntary contributions for their revenue, they are less likely to be responsive to the concerns of the public (e.g., police brutality) and more susceptible to corruption (see e.g., the Knapp Commission Report27 or just watch the movie Serpico).

(...)

It is worth noting that the contemporary crime problem is most severe where non-political methods of policing have been most completely displaced by government. The inner cities are the areas most dependant on government policing. Arguing that the high rate of inner-city crime and the presence of gangs implies that we must maintain a government monopoly on police services is a bit like arguing that the abysmal quality of inner-city public schools implies that we should not permit parents to use their tax money to send their children to private schools. And it can hardly  be surprising that it is difficult to suppress the violent organizations that exist to exploit the black markets created by government prohibitions on the legal marketing of drugs, prostitution, gambling, and other “vices.” But how any of this demonstrates the necessity of government provision of police is beyond me.

Government. Evil. Not necessary. But we need to internalize externalities. And for that, we need government. Ehm, no:

Until 1992, fast food restaurants served coffee at between 180 and 190 °F, a temperature at which the coffee can cause third degree burns in two to seven seconds if brought into contact with human skin. This posed a considerable risk of serious injury, given how often coffee served in styrofoam cups is spilled. I did not notice any proactive legislative regulation designed to internalize this externality. In 1992, Stella Liebeck won a judgment against McDonald’s for injuries received when she spilled coffee on herself equal to her medical expenses plus the amount of profit McDonald’s earned in two days from knowingly selling coffee at a dangerously high temperature. The next day every fast food restaurant in the United States served its coffee at 158 °F, a temperature at which it takes 60 seconds to cause third degree burns; a sufficient amount of time for customers to brush the coffee off their clothes or skin. There may be many things wrong with contemporary tort law, but being ineffective at internalizing externalities is most assuredly not among them. The only way to believe that government is necessary to resolve the problem of social costs is to be studiously blind to the nature of both common law and government legislation.

Government. Evil. Not necessary. But who else would provide public goods. Take creativity. On weblogs for instance creativity flourishes without the government intervention called intellectual property rights. 

Government. What is it good for? Absolutely nothing. Say it again. Anarchy: it’s obvious.

In this interesting post Sheldon Richman points out that capitalism is not the same as the free market and that not only Marxists were early opponents of "capitalism":

The question concerning the relationship (if any) between the free market and capitalism can be addressed at many levels. Let’s start with history. The word capitalist was indeed first used disparagingly by opponents of “capitalism.” But it is important to realize that among those opponents were advocates of property rights and free markets, such as Thomas Hodgskin and later Benjamin Tucker. Why?

The reason is this: In the periods regarded as classic “capitalist” eras, government intervention on behalf of capital was commonplace. Moreover, it was integral not incidental. In both England and the United States government intervened – on behalf of a privileged landed and then mercantile class – with land grants, subsidies, and commercial regulations. In America, this was true to various degrees at all levels of government, both before and after the Civil War.

Thus capitalism did not mean the free market, or laissez faire, back then. It’s not that the system fell short of an ideal. To the people on the ground, and to historians looking back, this was the system that was intended. Thus pro-business interventionism has a far better claim to the term capitalism than any unrealized free-market system.

And we could of course add, as Richman himself does, that capitalism does not mean the free market now. However, the introduction of the welfare state obviously has made the economy today less capitalist as before, without in any way restoring the free market. The left remains the enemy of capitalism as well as free markets, as Bryan Caplan rightly points out.

Let’s go to the level of definition. Then obviously capitalism and the free market are not the same.  The market is a system of voluntary exchange. Because exchanges on the market are voluntary both parties gain from the transaction. Otherwise they would not make the exchange. Capitalism on the other hand is a system of production, where the means of production are owned by the capitalists. And so only the capitalists reap the benefits of that ownership. As Franz Oppenheimer has pointed out:

For nothing can be more obvious than that those who own property reap the benefit from it, and the greater the property is, the more they reap. This, precisely, is the problem of distribution proper: why have some persons, orders or classes a small income or no income at all, whereas other persons, orders or classes enjoy large or vast incomes from rent or profit as the fruit of large property in land or in produced means of production? How, by which historical or economic process, have they acquired their property? Which of the two means by which property can be acquired has been of deciding influence in this process: personal labor and fair exchange, or fraud and violence; as Bastiat put it, "production or spoliation"?

And:

Capitalism took over all of feudalism’s basic institutions, especially two, the privilege of State-administration, and the monopoly of the land. In other words, it took over feudal class-domination and class-distribution. It abolished legal serfdom, but solely as a mere form, stripping the former serfs of the very best of their property, co-proprietorship of the landlords’ lands. Thus it gave them nothing but the empty shell of freedom, because freedom without property is only a mockery.

Substitute land with capital and the reasoning of course remains the same. Freedom without property remains a mockery. So what is to be done? Abolishing private property, as the Marxists want? The euthanesia of the rentenier, as proposed by Keynes? Further developing the welfare state?

I think those proposals are wrong-headed. Because capitalism historically has been a system of state instituted privileges for the owners of land, and later on capital, it does not mean that in the future capitalism and free markets cannot be complementary. On the contrary, abolishing the state, and thus abolishing the state instituted priviliges, could well result in a society that is more capitalist instead of less. Louis Kelso, for one, worked out a theory of what he called "full capitalism", a system that could be the basis of a free and classless society. The trick is in making everyone a capitalist. Instead of the euthanesia of the rentenier, we all should become renteniers. Is a system where the fruits of the ownership of the means of production are more evenly spread not a capitalist system then?

So even if the historical narrative of Richman is correct, and I for one don’t doubt that is it, his conclusions are wrong. Liberating the market from the state instituted privileges of the capitalists will not give us a non-capitalist society, on the contrary. Without the state there is no reason to suppose that we will not see a trend towards the democratisation of capital, especially when Richman is right. Of course one could always argue that Richman is wrong. In that case it seems that the proces of spreading capital ownership will need a push. The views of Shann Turnbull, in his Democratising the Wealth of Nations, are appropriate here:

The new approach for democratising the wealth of nations is based on four novel ways in which people may acquire wealth. All four methods have a number of common features and they all reduce, in various ways, the manifold inequities and inefficiencies of conventional capitalism. The four capitalistic innovations in the way that people can own and control things are:
1. Employee Share Ownership Plan (ESOP). The logic of business cash-flow financing is used to allow directors, managers and other employees to acquire part-ownership in the growth of their enterprise.
2. Ownership Transfer Corporation (OTC). Corporate employees can be remunerated with part-ownership of the enterprise, according to their contribution to new values.
3. Land Bank (community-owned land or town co-operative). New wealth created in land values of the community can be shared by all residents in the region, according to their contribution to its creation.
4. Producer-Consumer Co-operative (PCC). Wealth created from the ownership of depletable natural resources can be pooled and so shared with the wealth created by regenerative consumer enterprises.
The novel methods for distributing new wealth create a capitalistic alternative for achieving some of the more idealistic objectives of Karl Marx.
(a) The introduction of change into society on a continuous basis but without revolution.
(b) The democratising of industry but avoiding the transitory phase of State ownership.
c. The withering away of the State but by natural attrition, not anarchy.

Although the withering away of the State is at the end of the process, the result is the same: a stateless, classless society with a free market and a fully capitalist system of private ownership. At least that’s how I see it.

Dirk Verhofstadt, in een voor de rest overigens uitstekend opiniestuk, begaat hier een vergissing:

Onaanvaardbare praktijken zoals de onderdrukking van vrouwen, verplichte klederdracht, gedwongen huwelijken, genitale verminkingen, verstotingen en eremoorden kunnen in een liberale rechtsstaat absoluut niet.

Ik ben het eens wanneer hij het heeft over de ondrukking van vrouwen, of over verminkingen en eremoorden. Dergelijke praktijken kunnen overigens sowieso niet, binnen én buiten een liberale rechtsstaat. Maar als hij het heeft over zaken zoals verplichte klederdracht, volg ik niet meer. Dergelijke zaken behoren tot de privé-sfeer. Of er culturele druk aan te pas komt of niet heeft daar niets mee te zien. Het heeft dus ook niks te maken met cultuurrelativisme. Een cultuurrelativist zal dergelijke praktijken vergoeilijken omdat we respect moeten opbrengen voor andere culturen. Ik vind van niet. Culturen die bepaalde klederdracht verplicht stellen, vind ik minder waardevol (om het woord "minderwaardig" niet te gebruiken).

Maar de essentie van een liberale rechtsstaat is net dat die staat zich niet bemoeit met praktijken die tot de private sfeer behoren. Klederdracht behoort daarbij. Laakbare en amorele praktijken, zoals gedwongen huwelijken en verplichte klederdracht, moeten net kunnen in een liberale rechtsstaat. Zoniet, kan men het predikaat liberaal maar beter weglaten.

In dit verband overigens ben ik het ook niet eens met het verbod op het dragen van een boerka. Met veiligheid heeft dit niets te zien: terroristen proberen net zo veel als mogelijk in de massa op te gaan. Het is eigenlijk de andere kant van dezelfde medaille : verplichten versus verbieden. De Taliban verplichtte het dragen van de boerka, wij verbieden het. Wat is het verschil?

James Galbraith writes:

To put things crudely, there are two ways to get the increase in total spending that we call "economic growth." One way is for government to spend. The other is for banks to lend. Leaving aside short-term adjustments like increased net exports or financial innovation, that’s basically all there is. Governments and banks are the two entities with the power to create something from nothing. If total spending power is to grow, one or the other of these two great financial motors--public deficits or private loans--has to be in action

That indeed is putting things crudely sir! Galbraith forgets a third channel: productivity growth. And the most imporant one, because growth in productivity does not mean creating something from nothing. No, it’s real wealth. Productivity growth is what WE call "economic growth". When productivity grows, total spending power grows aswell. A growth in productivity leads to three results: higher profits, higher wages, and lower prices (or, in the best of worlds, all three combined). Higher profits means higher spending power for the capitalists, higher wages means higher spending power for the workers, and lower prices means higher spending power for capitalists ánd workers.

Only when you equate economic growth with spending, as Galbraith does, will bigger government deficits makes sense. But if you think that more spening power is the result of producivity growth (and not from creating something from nothing), then you can only stick with the free-market innovation machine.

Paul De Grauwe slaat nog maar eens de bal mis:

De moralisten onder ons, en die lopen niet alleen in Duitsland rond, maar ook in Vlaanderen zijn er enkele bekende economen die moraalridder spelen, die moralisten dus zeggen dat de Grieken het zelf gezocht hebben. Ze hebben jarenlang boven hun stand geleefd en buitensporige schulden aangegaan. Ze moeten nu maar op de blaren gaan zitten. Het is hun welverdiende straf. Geld geven aan die mensen zou een beloning zijn voor wanbeleid, en verkeerde signalen geven aan anderen. Juist natuurlijk. Maar zo eenvoudig is het ook niet.

De Griekse crisis is nu een systeemcrisis geworden. Een Griekse schuldcrisis brengt met zich mee een risico dat andere landen (Spanje, Portugal, Ierland, Italië, en ook België) meegesleurd worden in een algemeen wantrouwen van de financiële markten. Zo een crisis zou onvermijdelijk tot een nieuwe bankencrisis leiden in de eurozone omdat het grootste deel van de overheidsschuld van die landen aangehouden wordt door de financiële instellingen. Als we dus het kleine probleem van de Griekse schuld niet vlug oplossen riskeren we terecht te komen in een financiële crisis waarvan de proporties veel groter zullen zijn. We moeten dus kiezen tussen twee kwalen. Het eerste kwaad is geld geven aan de Grieken en zo wanbeleid belonen. De moralisten huiveren. Het tweede kwaad is niets doen en wachten totdat een veralgemeende financiële crisis ons dwingt om veel meer geld uit te geven. Ik kies voor het eerste kwaad om zo een erger kwaad te vermijden.

De ironische reactie van Geert Noels : "ik vermoed dat ik tot de moralisten behoor". Maar eigenlijk is het geen morele kwestie. Het is een puur economische kwestie. De redenering van Paul De Grauwe kan via zuiver economische argumenten worden weerlegt. Er zijn goede - economische - redenen om wanbeleid en risicovol gedrag niet te belonen, zelfs al kost het de Europese Unie dit keer niet veel om de Grieken bij te staan. Er is immers geen enkele reden om aan te nemen dat een bank of een land waarvan het wanbeleid wordt beloond, zijn gedrag in de toekomst op magische manier zou verbeteren. F.A. Hayek zag al bijna een eeuw geleden dat het voorkomen van een crisis alleen maar zal leiden tot een nog grotere crisis later. Het recente verleden bevestigt de stelling van Hayek. In 1998 kwam Alan Greenspan tussen om het hefboomfonds LTCM te redden. De kost was laag, en een systeemcrisis werd voorkomen (althans dat was de uitleg die Greenspan en zijn aanhangers er zelf aan gaven). De financiële markten waren er gerust op: als het fout liep, zou Greenspan toch tussen komten. De Greenspan-put was geboren. Vanaf dan werd geopteerd voor De Grauwe’s eerste kwaad. We kennen het resultaat. Het eerste kwaad vermeed niet een erger kwaad, maar was er net de oorzaak van.