My column for the FT this week (mentioned here two posts ago) states my own view on the implications of the financial crisis for the future of capitalism–namely, that the effects outside finance will be limited, and this is not the end of capitalism as we know it. Here are two other interesting and forcefully expressed opinions.
Harold Meyerson in the Washington Post thinks the game is up for “unregulated capitalism”:
In 1949, a number of famous writers, among them Arthur Koestler, André Gide, Richard Wright, Stephen Spender and Ignazio Silone, wrote essays explaining why they were no longer communists. The essays were collected in a volume entitled “The God That Failed.”
Today, conservative intellectuals might want to consider writing a tome on the failure of their own beloved deity, unregulated capitalism. The fall of the financial system has been so fast and far-reaching that there’s been no time to fully consider its implications for the reigning economic theology of the past 30 years. But with the most right-wing administration in modern American history scurrying to nationalize the banks, the question cannot be elided indefinitely.
What exactly do economic conservatives believe now that their god is dead? What’s become of the glories of privatized Social Security? Of the merits of 401(k)s vs. defined-benefit pensions?
No wonder we’ve seen a disoriented John McCain wandering the moors howling about Bill Ayers. What’s he supposed to do? Admit that the Reagan-Thatcher faith in unregulated capitalism, to which every GOP presidential candidate was pledging allegiance just last winter, has collapsed?
Interesting to see this dismiss the Clinton and Blair administrations as mere extensions of the Reagan-Thatcher order. Actually I agree with Meyerson about that: they were. But I thought that the Democratic narrative upholds the 1990s as an example of how good things can be when intelligent, well-meaning people are in charge. In other words, good government is more a question of competence and good faith than ideology. To abandon that line, you have to consign Clinton and Blair to the trash.
I was also a bit puzzled by this:
McCain and Barack Obama disagree sharply on the government’s role in bolstering the economy. Obama favors public outlays on alternative energy and education, which would not only create jobs but also make us more competitive globally.
What is this, “make us more competitive globally”? Surely that is the old, dead paradigm. Even as the piece reads its last rites, that Reagan-Thatcher way of thinking is stirring back to life. If you are going to dispense with market forces, I don’t think you can afford to care very much about staying competitive globally.
The other piece, much more to my own way of thinking, is by Simon Jenkins. For many years (outside the specialist domain of economic commentary) he has been my favourite British pundit, and one of the two or three best I have come across anywhere. Rigorous, liberal (in the old-fashioned sense), open-minded and surprising. See what you think:
So this is to be Brown’s Falklands. Victory on Mount All-fall-down. Bonfire of the bonuses. Service in St Paul’s. March-past by the Royal Troop of Derivatives Traders. Anthem to the Bankers’ Brigade. Tomb of the Unknown Arbitrageur.
A fortnight is clearly a long time in ideology. What fun historians will have with October 2008. Do you remember the hoary old days when they let Lehmans go bankrupt and refused to guarantee bank deposits? Where were you when a governor of the Bank of England worried about inflation and something called moral hazard? How tables turn. Socialism is now cock of the walk, capitalism mugged by reality.
It is rubbish, total rubbish. Market failure has been compounded by brain failure of the discredited profession of economics, overwhelmed by journalistic wish-fulfilment and glee.
The banks have not been “nationalised”, just deluged with money. They remain pluralist and competitive institutions, with independent boards. Their workers are not civil servants. Investors retain their shares. The bonus culture will revive. The impresarios of greed have been punished, or at least a few of them. But this is not socialism in our time, just public money hurled at the face of capitalism.