Monday, December 26, 2011

Why Capitalism Is So Important

It's important because it works:
One of the central dynamics that made Britain great for so long still seems to be working. Financial and economic crises recur in healthy capitalist economies. When these crises come, some countries that have only reluctantly embraced a capitalist system (and usually done so poorly and half heartedly), see the crisis as proof that capitalism is a flop, and lurch toward “alternative models” that generally lead to stagnation and the capture of the state by rent-seeking elites spouting empty populist slogans. Think Argentina. Think Greece.

Britain is one of the countries that historically responds to crises of capitalism by doubling down: seeking reforms that make capitalism work more effectively rather than trying to hobble and block it. Between World War Two and Maggie Thatcher Britain lost its way, bumbling through decades of decline and well intentioned but hopeless efforts to find some other way to grow.
I defy anyone to find a better economic system for creating general prosperity, especially when it is coupled with a democratic-style government.

7 comments:

mazenko said...

With a small concession. It's the mixed-market capitalism by which societies thrive most effectively.

allen (in Michigan) said...

> It's the mixed-market capitalism by which societies thrive most effectively.

Har!

Yeah, a command-based economy sucks but just the right admixture of command-economy regulation improves free trade.

Let's see how that works with ice cream.

I'll mix a teaspoon of dog droppings into a gallon of ice cream and you tell me if it improves the flavor.

Darren said...

Let's be realistic--without good laws, markets devolve to barter and cavaet emptor. On the other hand, "government governs best which governs least." The latter is the best of both worlds.

allen (in Michigan) said...

Mazenko isn't arguing for "government which governs least" but "as much government as possible".

Unfortunately for proponents of that point of view the examples of the failure of that proposition are legion whereas the response to which they inevitably resort, the bogeyman of anarchism, has a rather less impressive resume of failure.

If it's a choice between the two, anarchy and authoritarianism, I'll pick anarchy every time. An anarchic situation inevitably self-organizes toward that "government which governs least governs best" ideal and an authoritarian state inevitably ends up as a kleptocracy.

mazenko said...

Not at all what I am arguing, Allen. You're so myopic.

MikeAT said...

OK then mazenko, what are you arguing? Specifically, what it the "small concession" you referred to in your first comment?

allen (in Michigan) said...

> Not at all what I am arguing, Allen. You're so myopic.

In fact, I am myopic not that the flaw prevents me from seeing through the excuses and prevarications of those who view representative government as a burden that must be borne to the extent it can't be undermined.

But there are more forms of myopia then what's diagnosable by an optometrist.

There is, for instance, the form of myopia that prevents the beneficiary from noticing their own uniform record of failure. That may be a mercy since the sufferers of the condition feel no sense of responsibility for the damage caused by those failures.

Government is power. It's coercion. In its representative form government is the domestication of violence with a somewhat equivocal record of success of keeping that violent power out of the hands of those who'd use it for their own ends.

If it's a choice of erring toward anarchy versus erring toward authoritarianism history provides numerous, clear lessons about which direction results in less suffering.