The Moral and the Practical
Yaron Brook, President and Executive Director of the Ayn Rand Institute, had taken a legitimate hit after Pulitzer Prize-winning journalist Hedrick Smith relayed the story of the ex-Federal Reserve Chairman as an example of laissez-faire economics gone wrong.
Moderated by Suffolk’s Chair of the Government Department Rachael Cobb, “Money and Power: A Debate” pitted Brook against Hedrick in a debate over what the true cause of the 2008 Great Recession was. The Ford Hall Forum hosted the two as they shared their views of the current marketplace.
Despite the fact that the debaters held opposite views (Brook favoring a free market economy and Smith considering deregulation as the cause of the recession) they looked like brothers. Both wore a black jacket, blue shirt, red tie and glasses with matching white hair. However, the only brotherly thing about these two was the respect they shared for each other.
At one side of the table, Smith stated that the people need the government to keep them safe from other people, saying that “you need someone watching the store to make sure the game is played fairly. Greed kills.” He claims “we live in a compact and complex society,” that calls for government intervention to protect everyone’s basic rights.
Opening with the fact that he “90 percent disagrees,” with Smith, Brook attacked the current amount of regulation performed by the government. “A civilized country is the one where we eliminate the power of an individual to coerce,” he states. “The government is only there to protect us… from the coercion of others. Today, the government is the main coercer.”
The debaters mirrored a philosophical question waged among men from the past: are people inherently good or evil? Brook favors John Locke’s theory that people are generally good and would not want to hurt one another. He therefore focused on the morality imbedded within man, stating that “there is no difference between stealing interpersonally and stealing within government regulation,” (such as wealth distribution) meaning the government has made such acts legal.
The more pessimistic and Thomas Hobbes-like of the two, Smith believes that without the government, people will simply steal to infinitely improve their lives. His views come from a practical viewpoint, focusing on how in a perfect society everyone can be trusted and no one would do any wrong, but in the one we have people need to be regulated.
This is where the Greenspan situation came in to the conversation. Brook articulately said “why does fraud only come to certain industries? Because they are the most regulated [banking] industries.” With several examples of corporations overseen by government entities that were allowed to commit crimes without facing a penalty, Brook received nods and applause.
Then Smith was given a chance to reply. Going back to the 1980s, Smith recapped the series of government deregulation that led to a lax economy which gave way to the recession. He relayed Greenspan’s “we can trust the market” quote that had been made in 2004 just before the crisis began due to mortgage companies giving far more than they should have been able to. Again, the audience nodded and applauded.
Brook was not thrown off for long. He came back with “what we have today is one of the most perverse markets we have ever had,” citing the massive fraud found within the government housing market which holds 95 percent of mortgage loans. If not for Cobb’s stern moderating, the men could have gone all night solely debating the housing market.
The men were evenly matched to the point that the audience was uncertain of whom to lend their support. Those not on the stage were also given a chance to stump Brook and Smith, asking a range of intellectual questions such as whether inequality and mobility are good or bad for society.
The debaters answered true to their philosophical roots. Brook returned to placing trust in the people, saying that “we need economic mobility. We need capitalism. And by capitalism I mean a free market economy without government force.”
Smith feels that inequality has gone too far due to greed and is now keeping people from achieving their potential. At one point he sounded like a real Will McAvoy when saying “we were the land of opportunity. We have lost [that] title.”
The men managed to agree that economic (moderate) inequality and mobility is necessary for a society. Despite their focus on practicality and morality respectively, the debaters also came to an accord on the fact that the American people are now obscenely unequal.
Well matched and powerfully opinionated, Brook and Smith gave the audience at the Ford Hall Forum an incredible debate. Both were articulate, informed and well-read to the point that it was impossible to decide who could be considered the victor.