Always, and in all ways freedom and individual liberty will forever be the favorite whipping boy of those with a socialist bent. Populist’s, such as the new President are in bed with socialist on a number of issues that are directly related. Be that Gun Control, or taxation. However, the economy is currently at the forefront. Below, is an excellent expose of this better than thou attitude by those that are of the collectivist mind set.
Has free-market capitalism died?
Michael Miller
Who would have imagined 20 years ago — when the Berlin Wall fell and we celebrated the death of socialism — that capitalism would be under heavy fire? The cardinal of Westminster, Cormack Murphy O’Connor, reportedly said 2008 was the year when “capitalism died.”
What are we to make of capitalism in light of all the crises, fraud and government intervention, when even some traditional supporters of markets are supporting bailouts?
Before answering this question, it is important to note that “capitalism” is a Marxist term. It gives the impression that the market is a nebulous force. This impersonal understanding can lead us to blame markets when things go wrong instead of exploring reasons that are harder to diagnose.
Pope John Paul II rejected the term, preferring “market economy,” “business economy” or “free economy.” He did so to illustrate that markets are networks of human relationships. This sheds light on the underlying moral nature of markets.
Markets are the combined activities of millions of individuals. They are not composed merely of some guys on Wall Street; they are made up by us. Like anything else run by humans, markets can fail. If we become overly speculative and convinced that prices can go nowhere but up — as happened in the Tulip Bubble in 1637, the dot.com bubble in 2000 and the recent housing bubble — sooner or later reality will set in.
Despite their failures, however, free markets have lifted more people out of poverty and helped create prosperity and peace better than any system.
In these days of financial turmoil, we often hear critics speaking about deregulation or “unbridled capitalism.” But try to think of one country where there are no regulations. For free markets to succeed, they require a framework built on rule of law, contracts and secure property rights.
The real question is what kind of regulation and what level of intervention we should choose.
Many contributing causes of this crisis were an overly invasive government. Federal regulators required banks to provide mortgages to customers who could not pay back the loans; the Federal Reserve manipulated the money supply, exacerbating the housing boom; and politicians promised bailouts that created incentives for irresponsible behavior.
How many of us, out of greed, gluttony or pride, used credit cards to buy things we did not need or could not afford? What about Wall Street bankers who took imprudent risks with clients’ money? Markets cannot succeed without a strong moral fabric among the citizenry.
Yet we again hear calls for increased regulation and government involvement.
If we regulate too much, we concentrate the power of markets in fewer and fewer hands. This has led to all sorts of evil and corruption. Socialist economies, cartels, oligarchies and union-controlled industries produce stagnation and create incentives for corruption. It is a false hope to believe regulation will make everything right.
It is likewise delusional to believe markets alone are enough. Our Founders taught us that without virtue political liberty could not long be sustained. The same holds true for economic liberty. And yet without economic liberty there can be no political liberty. Like liberty, the market must be moral, or it cannot exist.
Michael Miller is director of programs at the Acton Institute for the Study of Religion and Liberty in Grand Rapids. E-mail letters to letters@detnews.com.
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