Wednesday, December 17, 2008

Is Capitalism Dying?

The author of Dilbert, Scott Adams', predicts the "End of Capitalism". I don't agree, but I was surprised because he believes the debacle in the housing and credit markets are the result of a crime by "suits" and crooks enabled by technology. I hesitate to use the words "losing faith" in markets, because I don't think it's historically accurate or even true as it implies some religious inference to a singular beast.

Markets exist in the vacuum - we have seen ever greater freedom in markets not because governments have allowed them to exist but because governments have retreated. This has been a direct result of their own incompetence and inability to meet the needs of their constituents. 'Unintended consequences' are the words that habitually follow new government regulations and programs. While Adams labels socialism as too costly, he predicts greater regulations and controls - as if that won't be too expensive? This also requires a massive leap to believe that regulation and government policy didn't play a major role in the best case and was in fact the cause, in the worst case scenario of this market mayhem.

Scott Adams' mistake is in misdiagnosing the cause of this mess. And little wonder, with the current US administration flailing to maintain some semblance of control, throwing money anywhere and everywhere with the most vocal pundits cheering them on if not too stunned to object. Try reconciling Joseph Stiglitz attack on "capitalist fools" (Vanity Fair) - an attack fraught with ontradictions as John Tamny in points out. It's frustrating to watch the government response pointing stubby little fingers at "Wall Street Greed" despite the volumes of evidence to the contrary (

Blame Capitalism? Only if we really had it in the first place (PJMedia). But with the stated intentions of the coming Congress and US Administration, it would seem that Capitalism's about to take a break - and that's bad news for everyone.

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