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The pendulum of economic policy

July 11th, 2011

A libertarian-minded economist disputes the Government’s claim that it is pursuing a completely new and unorthodox economic policy.

Writing in Heti Világgazdaság, Gábor Filippov does not deny the novelty of the government’s approach in some fields, but says this approach is rooted in an   increasing role for the state.

Filippov rejects the thesis developed by Minister of Economy Gyorgy Matolcsy and other decision-makers, who present their own approach as a “new economic policy,” intended to alleviate problems caused by the “neoliberal decades,” and which should simultaneously curtail speculation and build a labour-based economy.

On the contrary, he suggests that the main goals which the Government has set itself are embarrassingly similar to those of its predecessor, despite the protectionist, pro-small and medium size enterprises (SME’s) and anti-multinational rhetoric. One difference he does detect lies in a significant change in the philosophy of the role of the state in the economy – unwelcome for someone who agrees with Friedrich Hayek’s classical libertarian idea that the state is never well informed and is therefore bound to take bad decisions. He does not discuss the question of whether the market proved to be better informed before the latest financial crisis, but acknowledges that a balanced mix of market and government regulation is required. Nevertheless, he believes that in a few years’ time, people around the world will turn once again towards the accursed Hayek, one of the fathers of neoliberalism, rather than snapping up the latest editions of Karl Marx.