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Deepak Lal and Market-Oriented Policies

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Deepak Lal, an outspoken champion of freedom and market‐​oriented policies throughout the world, died yesterday in London.  I heard the sad news from my friend Ed Feulner who called on the phone tonight, and I just read the beautiful tribute by Ian Vasquez Remembering Deepak Lal. Deepak was professor emeritus at UCLA and the University College London, and a senior fellow at the Cato Institute. He earlier worked at the Indian Foreign Service, advised the Indian Planning Commission, and wrote many good books. Deepak also served as President of the Mont Pelerin Society (MPS) from 2008-2010, and he and his wife Barbara attended the most recent meeting of the Mont Pelerin Society at the Hoover Institution at Stanford in January 15-17 of this year, where he gave the closing toast as shown

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Deepak Lal, an outspoken champion of freedom and market‐​oriented policies throughout the world, died yesterday in London.  I heard the sad news from my friend Ed Feulner who called on the phone tonight, and I just read the beautiful tribute by Ian Vasquez Remembering Deepak Lal. Deepak was professor emeritus at UCLA and the University College London, and a senior fellow at the Cato Institute. He earlier worked at the Indian Foreign Service, advised the Indian Planning Commission, and wrote many good books.

Deepak also served as President of the Mont Pelerin Society (MPS) from 2008-2010, and he and his wife Barbara attended the most recent meeting of the Mont Pelerin Society at the Hoover Institution at Stanford in January 15-17 of this year, where he gave the closing toast as shown in this photo.Deepak Lal and Market-Oriented Policies

I remember much about Deepak’s wisdom and inventiveness, but most of all I now remember how he created a special meeting of the Mont Pelerin Society in New York City in March 2009. We can learn from his approach.

The meeting was entirely his idea–a response to the global financial crisis that we confronted at the time. Deepak tells the story in his MPS Presidential Address, “The Mont Pelerin Society: A Mandate Renewed,” on March 5, 2009:  Deepak’s neighbor asked him if he still stood by the views in his book “Reviving the Invisible Hand.” At first, he answered yes: even a severe downturn would not undermine the well tested classical liberal principles. But then the Lehman catastrophe doomed “the hopes of a classical liberal resolution of the spiraling crisis” and even conservatives argued for a fiscal stimulus and other interventions.

In Deepak’s view, “This marked a turning point” and the crisis required an assessment of whether “our views and the policy conclusions we had derived from them were misguided. For all ideas need to be continually re-examined to test their continuing relevance and validity. And ideas are the lifeblood of the Mont Pelerin Society.” Deepak reported that “It was in this spirit that in early October [2008] I approached my fellow members of the Executive Committee [of the MPS] about a special meeting to discuss the global financial crisis. Their response was gratifyingly warm and supportive.”

And so, he called for a special meeting. “The program was drawn up with a number of questions in mind. The first, and most crucial is how have things come to such a pass, with a severe global crisis developing during the watch of supposedly classical liberals in charge of US economic policy? Second, were the theoretical presumptions of the classical liberal policy consensus sound, and still valid? Third, what are the likely international repercussions of the crisis and responses to it for the wholly benign process of globalization? Fourth, are the Obama administration’s policies well judged, or are they likely to lead to another period of stagflation and dysfunctional expansion of Big Government? We need to answer these questions…”

I went to Deepak’s MPS meeting in New York. It was great success. But the reason I remember Deepak’s story so well now is that the situation today is so similar. We again have a global economic crisis, even if its origins are a Coronavirus. The economic damage is great, probably greater. And the policy response is highly interventionist, probably more so than in 2008-09, with an initial emphasis on closing rather than opening markets.

The closing ordered by governments is understandable, but such efforts get in the way of markets. It is important for those who understand the advantages of markets to speak out, to write, to explore ways to use market-oriented policies, to look for new methods to relax regulations, and to ask questions like the four that Deepak drew up 11 years ago. That is the kind of remembering that we really need now.

John Taylor
John B. Taylor is the Mary and Robert Raymond Professor of Economics at Stanford University. He formerly served as the Director of the Stanford Institute for Economic Policy Research where he is currently a Senior Fellow. He is also the George P. Shultz Senior Fellow in Economics at the Hoover Institution.

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