"The current state and the current banking sector require one another; neither can exist without the other. They are so reciprocally intertwined that each is an extension of the other.
Remember this point the next time somebody tells you that "free market madmen" caused the current financial crisis that is threatening to undermine the economy. There is no free market. There is no "laissez-faire capitalism." The government has been deeply involved in setting the parameters for market relations for eons; in fact, genuine "laissez-faire capitalism" has never existed. Yes, trade may have been less regulated in the nineteenth century, but not even the so-called "Gilded Age" featured "unfettered" markets."
Wednesday, February 04, 2009
Free Market Capitalism Isn't at Fault - It Doesn't Really Exist
Via Instapundit, I ran across this post at Notablog. It has become fashionable in certain circles lately to blame unfettered free-market capitalism for the current mess in the banking system. The author of the post, Chris Matthew Sciabarra, argues that it can't be true, because unfettered free market capitalism has never truly existed:
I think he has a valid point. This just lends more credence to my own frequent assertions that we are where we are due to politcal interference in the market, which leads to irrational behavior. When the government stops trying to "help", that is when the markets will start to find their equilibrium. That isn't to say there won't be further ugliness. There will be. It just means that they can finally find clearing prices for toxic assets and get back to business without all the uncertainty that political interference breeds, and that markets hate
Read the whole post.