The problem with socialism is that is rewards only those in government and those who serve their ends and always destroys the middle class and makes the average citizens just another member of the poorest of people. The socialist system bankrupts everyone and eventually destroys itself after much suffering and bloodshed.
The argument over government and the business cycle continues.
Take your pick: More government involvement with fewer but far more serious recessions. Or less government involvement with morre frequent, but less serious recessions.
The problem with government involvement is that it fuels massive bubbles when it gets involved, either by lowering interest rates (then not raising them in time), or by deregulation of usurious business or banking practices.
Do usch bubbles occur naturally? Sure, but they’re rarely as serious. IMHO, the government needs to regulate usury in all its forms, then pay more attention to immigration and the makeup of the population rather than interest rates.
The problem isn’t so much regulation but the irrestible urge of government to tap into the wealth created by capitalism. It’s theft, rationalized initially to defray the cost of regulation, then outright redistribution to the less or nonproductive elements who are quite simply, envious. When government has the access to private wealth, the temptation to steal for political advantage is overwhelming.
I reject the idea that there is a “capitalist system”.
The freedom to own what is yours and to buy and trade with others is natural law, and the biblical way.
All capitalism needs from government is a stable, predictable legal system, stable and predictable fiscal and monetary policy, and an impartial system of arbitration and courts in which to resolve disputes.
Having secured these, it is then government’s role to stay entirely out of the way.
Capitalism always needs order - ability for contracts to be enforced and property rights to be enforced. With a moral people the need for government is less.
But government manipulating aggregate supply and demand? Who is the quack that wrote this?
I'm not going to read this drivel, but would like to point out that the goal of "capitalism" is not stability.
Capitalism (which word is itself a Marxist insult to the concept of free market trade among peoples) produces goods and services because humans are productive, but the growth of productivity occurs because humans are also creative. Creativity is all about destruction of old ideas by replacing them with something new and improved.
Introduce government and collectivism into the mix...and see the whole system grind to a halt as the element of creative destruction is replaced with stability and (to use Obama's favorite term) "fairness."
I would like to know what other capitalistic system has existed out side the USA?
Unless there has been such a system, they must have failed for them to say it has never worked.
What price freedom? I’ll take the risk of more economic “instability” over the fascist government/crony protection racket.
GDP is the sum of Consumption, Investment, net Exports X and government spending G...GDP=C+I+X+G. The Keynesian idea that increasing government spending G increases the GDP fails to understand that the increased taxes or debt needed to fund this government spending decreases consumption C, investment I and makes net exports X more negative as US production of good and services for export decrease with lowered investment. Consumers necessarily spend and invest less when their disposable income is reduced by higher taxes.
Another important point made by Hayek in The Road to Serfdom is that increased government control over the economy diminishes individual liberty. The economist Milton Friedman also related how government control of the economy means less choice and freedom of enterprise.
We have to no more than look at the government controlled socialist economies of Europe to see the failure of more government involvement.
I don't know.....you know what DOES work?
Paragraphs.
What's my motivation for bothering with anyone - about anything - who doesn't understand the concept and use of paragraphs?
Seriously. What a bunch of self-important nonsense.
Capitalism needs minimal government involvment.
The author chooses a time period where our economy was in the midst of a transformation from agrarian to industrial, ending with the Great Depression which was brought about and lengthened by government interference.
By the author’s “logic” investing does not work well enough because the returns are too uneven. Only a Madoff-style Ponzi scheme gives satisfactory results.
“Government is not a solution to our problem, government is the problem.”
Ronald Reagan
The problem with the 1853 to 1953 time frame is this the time frame was clearly cherry picked to find the worst 100. This is dishonest. Next, from about 1916, our economy has been centrally planned and always directed towards socialism. Why doesn’t this dishonest writer show us the economy from the beginning of the nation to say,,,, 1900? The world was amazed by us then. We had about 4 times the living standard of Europe. All based on the simple idea that people kept what they earned,,, and that government was only meant to protect from force or fraud.
Capiltalism needs a strong and unflinching regard for fiduciary duty, honest books, understanding and respect for the rules of agency, trusts and bailments, courts willing to enforce all that, as well as a gold or silver based currency. That’s about it.
But all of the above is ABSENT in modern capitalism.
Socialism always fails, always. Capitalism isn’t perfect but it the best. The author is a moron.
I use the analogy of a football referee.
You wouldn’t have much of a football game without referees, but their role should be merely to make sure the rules are being followed. A referee should have no concerns about who wins and who loses. That should be the role of government involvement.
On the other hand, if referees operated like the government does in today’s climate, referees would be telling each team which plays they can and can’t run, which players can and cannot be on the field, and would have a vested interest in one team winning.