I find it interesting that in times of financial crisis, we start to question the long term viability of unfettered capitalism, yet we seem happy to leave such questions unasked when times are 'good'.
There is sound argument for strategic government economic intervention in both good and bad times. Indeed, it is arguable that such a steadying hand on the economy may well prevent crises from actually occurring.
The trouble is that the fall of the eastern bloc has been broadly misinterpreted by many as the triumph of unfettered capitalism. This is, at best, a simple answer to what was a very complex situation.
Of course, everyone loves simple answers. They are, well, so simple! Some commentators go so far as to cite Occam's razor as a rationale for simple answers. Yet William of Occam lived at a time when there were few, if any, 'national' economies as we know them, let alone a global economy.
If we leave the global economy solely in the hands of big business, then we deserve what they will inevitably leave us - crises.
Big business is predominantly focused on short term interests. For example, the average CEO stays with a company around three years - usually just long enough to pick up his/her bonuses without having to answer for their blunders. Those bonuses are often calculated using profits and share price increases as at least two of the important factors. Those factors are both 'short term' in nature, especially when the CEO would be expecting to move on in less than three years. Do all CEOs have a long term strategic view? I'll leave you to answer that one.
The share market is populated with people looking to make quick money. By way of example, what else is short selling intended to do?. Therefore, as we have recently seen all too often, the market becomes overheated and someone has to pay for the inevitable corrections (I realise that this is a simplification, but this is a posting, not a textbook on strategic economics).
The only entity really in a position to take a long term strategic view of the economic situation is government. But of course it is populated with politicians who want to be re-elected for another term. And that takes money, often with the larger donations coming from big business.
Government needs to be mildly interventionist if capitalism is not to go the way of socialism, sinking in the mire of the self-interest of those who are supposed to be thinking strategically. Unfettered capitalism is no better that centralised socialism, it is just different!
I will leave you with two predictions for the future. First, if capitalism is still around in 200 hundred years, it will certainly not be unfettered. Second, there will be a widely accepted serious offence of being an 'economic criminal'. Not in the Soviet sense, but in the sense of intentionally placing self interest ahead of society's interest to the extent of causing economic harm to others.
My final comment is simply - I am not a socialist, I am a small business owner who wants to have that small business intact and in a position to pass on to someone else when I retire.
