Free-market Credibility Gap Widens

"...The public trust deficit hangs over all companies and free-market capitalism, not just the financial sector, and the trust deficit is playing a major role in current debates over increased government regulation of the economy. It is a major mistake for leaders in business and the gatekeeping professions such as law not to undertake a serious self-assessment of responsibility for the current catastrophe with proposals and action to rebuild public trust.

Much is at stake. I am among those millions of Americans who, over the last 40 years, concluded that a strong presumption in favor of market solutions rather than government regulation offered the best hope for addressing many of society's challenges. Both Democratic and Republican administrations supported deregulation of banking and finance, programs to increase home ownership and an easy money policy -- so long as it did not lead to serious inflation.

We trusted in the prudential judgment of business leaders to make rational decisions that would avoid financial catastrophe. But we now are questioning whether we substantially overinvested in the ideology of free-market capitalism.

We realize that capitalism has an inherent struggle in which excessive short-term self-interest and hubris sometimes trump the "self-interest considered upon the whole" that generates long-term wealth creation..."

Neil Hamilton
Star Tribune


Roadkill said...

“It is tempting to believe that social evils arise for the activities of evil men and that if only good men (like ourselves, naturally) wielded power, all would be well. That view requires only emotion and self-praise – easy to come by and satisfying as well. To understand why it is that ‘good’ men in positions of power will produce evil, while the ordinary man without power but able to engage in voluntary cooperation with his neighbors will produce good, requires analysis and thought, subordinating the emotions to rational faculty. Surely that is one answer to the perennial mystery of why collectivism, with its demonstrated record of producing tyranny and misery, is so widely regarded as superior to individualism, with its demonstrated record of producing freedom and plenty.”

Milton Friedman

Let the markets punish the inept and the incompetent, and the law punish the corrupt. But putting government officials in charge will only lead to control by inept, incompetent, and corrupt politicians, who answer neither to the markets nor to the law.

Roadkill said...

“The engine of unbridled capitalism, with its unfair system of thought, has reached the end of the road and is unable to move. Selfishiness and insatiable greed have taken the place of such human concepts as love, sacrifice, dignity and justice. The belief in the one god has been replaced with self-belief.”

Iranian President Mahmoud Ahmadinejad

Looks like Ahmadinejad and Neil Hamilton think alot alike. Perhaps the Iranian strongman could get a job writing for the Star and Tribune.

Sunny B. said...

I don't have a problem with "Capitalism," but I do have a problem with "unbridled capitalsim." If that means regualtion-free, no-holds-barred, pedal-to-the-metal capitalism, I think there are only a few extremists that would go for this brand of economic free-for-all. Not even Mises or Hayek would sanction that monster.