If capitalism does fail, the alternative is far, far worse

Calls for greater state supervision of the economy must be resisted, however tempting they sound.

Alasdair Palmer
Telegraph [UK]
08 Oct 2011

There were riots and a general strike last week in Greece. In New York, several hundred demonstrators occupied Wall Street, in a sit-down protest against the finance industry that is being imitated in several other US cities, and may well spawn something similar here. The anti-capitalist movement is on a roll.

With the exception of a few anarchists and some old-fashioned communists, the protesters don’t have a coherent alternative. But if they’re not sure what they’re in favour of, they know very well what they’re against: bankers and their bonuses, and the system that hands them billions in bail-outs, while cutting the services relied on by ordinary folk.

It would be a mistake to dismiss them. For their grievances against the form of capitalism currently operating in most of the developed world are increasingly widely held – and they can’t be disposed of simply by pointing out that the banks, and the finance industry, are necessary to economic growth…

…What, then, is likely to happen now that free markets are going out of fashion, and state supervision is becoming an intellectually respectable alternative? The short answer is: a rapid increase in the portion of the economy controlled by the state. The process has its own momentum. It never stops of its own accord. Everyone should know what it will mean: permanent economic stasis, if not contraction; a lack of innovation and development; a diminution of opportunity for everyone; and an enormous increase in bureaucracy, waste and inefficiency. That has been the long-term legacy of state control everywhere it has been tried.

Sadly, that truth has no traction at the moment. So defenders of capitalism urgently need to come up with a way to remind everyone of the dangers of thinking that things will improve when they are run by the state…

Read the entire article at The Telegraph.

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