With a certain weary inevitability, the cries of pain emanating from those seeing their aspirations ground to dust amid the current upheaval in financial markets have been interspersed with the shrill descant of those all too eager to proclaim a 'crisis of capitalism'.
The implication that it is now time for those far-seeing, disinterested Solons in government to step forward once more and to put right what mere 'market forces' have again so woefully failed to correct.
High finance, we are told, has become a business of 'privatizing profit and socializing losses', a thoroughly inequitable mechanism which the state now has a duty to redress by erecting a whole new framework of Do's and Don'ts in order to rein in the 21st century's version of the Robber Barons.
While the initial diagnosis is fairly unexceptionable - since that is precisely what financial market institutions generally do seek to do - the corollary is not. Nor is this just because politically opportune Witchfinders General tend to be more guilty of fighting the last war than even the most hidebound of generals, nor because the analogy is decidedly unfair to the original Robber Barons, many of whom grew rich by creating genuine wealth and not simply by living, often obscenely high on the hog, off that generated by others.
No, the whole concept of a 'market failure' is a hoary old canard which it is vitally important to dispel for fear that an eager Leviathan will again exploit its subjects' understandable present anxieties in order permanently to increase its power over their lives and liberties.
Monday, March 31, 2008
Sean Corrigan has a long, but very accurate article at Mises.org about the banking system and why it is at the root of our current problems. Here's an excerpt but by all means read the whole thing:
Posted by Boomer at 6:03 PM