Saturday
Aug112007
The markets
Issandr El Amrani
Is it just me or do banks, hedge funds and other financial companies always cry out against government intervention, except when they need a bail-out or central banks to intervene in the markets to restore stability after their irresponsible unfettered speculation blows up in their face? Just asking.
Reader Comments (6)
Issandr, that's capitalism for you.
Capitalism? What does that have to do with capitalism? It's merely the banks acting like every other interest group on Earth - using the state as a means of extracting rents by transferring wealth they could not obtain through voluntary exchange (i.e. pillage).
The only relationship this bears to capitalism is that it's the exact OPPOSITE of capitalism. The state is very good at granting favours to special interests in order to secure its own position, even though doing so favours the narrow interest of the few over the wider public interest.
Capitalism indeed. A healthy dose of free markets would do the banks wonders.
But of course. And there's corporate welfare too - which is what preferential land allotments and SEZs are all about.
If you ask some of those people how they can rationalise corporate welfare while crying themselves hoarse about the need for individual responsibility and bootstraps etc, they will often tell you, straight-faced, that they have a social responsibility, and many hundreds of livelihoods depend on their companies' survival.
This isn't capitalism, it's the opposite of capitalism. It's rent seeking and the forcible transfer of wealth which the banks couldn't obtain through voluntary exchange (i.e. it is pillage). It's no different than subsidies to farmers, tax breaks for a given industry or tariffs on textiles. It's all the state leasing its monopoly on the use of force to private interests and to hell with the public good.
There's no capitalism here. None whatsoever. Free markets sound like a nice idea, now let's try them.
You know, I'd be a little annoyed if my favorite economics blog started tossing off cheap one-liners about what Arabs and Egyptians "always" do...
Peifferc, are corporations people too?
And blogs are for ranting and one-liners.