A rather long article, and an interesting one by Joseph E. Stiglitz, a Nobel Prize winning economist. That's the opening, and here's the ending: I'm not particularly interested in debating the finer points of his article - I'm sure the free-marketeers will be quick to shoot it down without reading it, and those who don't want to believe it will find multiple reasons to consider themselves right and the article wrong. But I'm wondering ... will the massive economic problems in this country lead to a reappraisal of the "free market" philosophy? Will it have any impact at all ideologically? Will enough people change their mind about capitalism to change the economic system of the United States?
that was a pretty good piece. Though I don't think he was attacking the free market, more likely the problems were with the Randian fantasy of unregulated markets uber alles which has come collapsing down. By the way, speaking of Ayn Rand, can their be a bigger refutation/disapproval of "Atlas Shrugged" than the events of the last few months? To refresh your memory, that book was an objectivist wet dream about the heroic industrialists who, fed up with labor and taxation and regulation and parasitic bureaucracy, staged a strike and refused to open their factories. Now over the last few months, we have seen the country's biggest industrialists and financiers go begging, hat in hand, to the government and the taxpayers for help lest they go on involuntary strike. I hope they appreciated the irony of this, and the fact that objectivism is best left to video games like BioShock rather than with people f-king with monetary policy.
Great article, teh thadeus. My own perpective is that free market capitalism is as utopian as communism. And just as unrealistic.
No time to read the article right now, but recessions occur in all economies. Economies can only be judged by whether they survive recessions and florish more than they are down. Maybe I'll understand more about its point once I read it.
This sort of observation really originates in a socio-economic system that is, itself, capitalist. It's like a fish making a judgment on water. And this isn't just a normal ups-and-downs recession - this is something wholly different, because (as the history of the problem indicates in the article) it could have be stopped at multiple points with controls on the 'free market' - but base greed from powerful people, political patronage, and a devotion to the free market ideology by most of the populace prevented better options from being exercised. Just throwing this in the 'these-things-happen' basket reduces the problem to such an extent that it seems to remove personal responsibility and the failings of the capitalist worldview from the equation entirely - and that is precisely the sort of perspective that will exacerbate these problems and allow them to occur again. My opinion is that this recession offers us the opportunity to make a heavy re-evaluation of the priorities and justifications for non-regulation at the highest levels of the economy.
Bingo. This is exactly what libertarians fail to understand. Human beings are incapable of going unsupervised without fouling things up. It's just not possible, period. When you let everybody run amok and allow "financial innovation" to run wild without putting oversight in place, you get dishonest lending, you get credit crises, and you get people like Madoff. You get stuff like the 1987 crash that was precipitated by out-of-control program trading. Free markets are a good thing, but freedom always has to have a price, otherwise you inevitably get anarchy.
Your evaluation of the situation is correct and the solution is simple stricter oversight but that is not case with the current crisis. The regulating body ie Congress was part of the greed and corruption that led to this point of turmoil. The Free Market was never FREE. It was in fact coerced and manipulated by both Washington and Wall Street. That is why they are running to cover their ends with swift bailouts. The financial industry in this country has been the most single most regulated aspect of the economy since the Great Depression. However, in recent years Congress allowed certain things to happen that shouldn't have by encouraging banks to make credit more acessible to a greater number of otherwise unqualified borrowers. My greatest area of concern is that everyone is demanding regulation of the "Free Market" and stricter control but then again the goverment is removing any incentive for companies to conduct sound business policies with guarantee of survival through bailouts of these "too large to fail" failed enterprises.
I guess I don't understand the question. You do realize what we have is not a free market, it is regulated and funded by national banks from around the globe. This is the case even before the bailout. The reality in this situation is that it is not a question of capitalist versus socialist because give me an example where socialist is the better idea. The poorest of the working poor in our economy are light years ahead of anywhere else in the world. For all the talk of China, California's GDP is still greater. There are some fundamental questions to be answered but they are not of the consequence of "let's scrap capitalism". The reality is that there is a lacking in responsibility of money in how we spend and how we invest. There is this supposition that we should be able to hand it to a stranger and that stranger should be able to grow it ten fold by retirement, which in itself is a made-up, american idea. No one wants to put blame on themselves this situation but the reality is that it is all our fault and we are the one's to fix it. We have to take care in our work to generate money, we have to take care in how we spend that money and we have to take care in how we invest. The government led effort to force us into 401K's and IRA has left everyone in disillusion. Enterprise is the only right way but lets not pretend that we live in a free market. The government will never be a replacement for human ingenuity and work.
I've posted this before, but it seems appropriate now... that's a New Deal era statue in front of the Federal Trade Commission. The horse symbolizes capitalism and the man symbolizes government. The man can't afford to let the horse run wild, but instead must channel it's energies to provide for his family. Since Reagan, the man is relegated to the porch and the horse is eating most of the crops and trampling the rest.
Yeah that and the fact that the Man was too busy standing in line in front of gas stations to get gas in 70s even before Reagan came along. If anything symbolic can be taken from this statue then its the fact that the Man is juiced up like a representation of our government; bloated and artificially enhanced.
^^i think the article's author would agree. btw thadeus, thanks for posting, it is an interesting read! if it doesn't we're the children of Sysiphus. liked this analogy from the article ...
The idea of a free market is up there with unicorns. Its an open secret that its only useful purpose is as a bargaining chip to usurp other market players. Any leader naive enough to actually try anything close to a free market will be 'persuaded' by others one way or the other.
While I agree to an extent, I think you fail to see the underlying problem. What good is oversight and supervision when those enforcing it are still HUMAN?
The key is to have a system where those doing the oversight have as little opportunity to benefit personally during their period of oversight as possible. That is not the case in our system. Politicians make a life of politics and get VERY rich doing so.
Greed killed brought this situation as much as deregulation which I guess is most everyone's point who have posted.
The current financial reality does not fit into any neat cookie cutter political category as one thing or the other. There is plenty of blame to go around for everyone.
capitalists are the enemies of free markets capitalism is much closer to communism or better put statism which is how our economy is run and very far from the principles of free markets. I just read the article, I wouldn't trust that economist with $5 I agree that a pure free market does not work with human nature, men are too corrupt, but to suggest the capitalist/statist system in control in the global economy is anywhere near a free market is intellectual hypocrisy capitalists are probably our biggest problem- they control both democracies and communist countries all around the world.
