Regarding the global economic crisis:
We must not revert to isolationism and unrestrained economic egotism… Excessive intervention in economic activity and blind faith in the state’s omnipotence is another possible mistake. True, the state’s increased role in times of crisis is a natural reaction to market setbacks. Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent… In the 20th century, the Soviet Union made the state’s role absolute. In the long run, this made the Soviet economy totally uncompetitive….
Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.
And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing.
Who is warning the world of the dangers of statism?
UPDATE: Commenter “Time for a Change” wins the challenge. It was indeed Russian Prime Minister Vladimir Putin, speaking at the opening ceremony of the World Economic Forum in Davos, Switzerland, January 28, 2009. After stating (as quoted above), “In the 20th century, the Soviet Union made the state’s role absolute. In the long run, this made the Soviet economy totally uncompetitive,” he added, “This lesson cost us dearly. I am sure nobody wants to see it repeated.”
Vladimir Putin
Name one place in the world, outside an Economics textbook, where pure capitalism has worked. Think the Deression would have solved itself?
Libertarian paradise? Somalia!!
http://www.youtube.com/watch?v=7QDv4sYwjO0
I think China is challenging the notion that the role of the state should be limited.
Elias Barnes,
“Name one place in the world, outside an Economics textbook, where pure capitalism has worked.”
“Pure capitalism?” Is that like pure communism, socialism, ……… mercantilism!
I see what you mean though…
Elias Barnes, >i>Think the Depression would have solved itself?
Yes, it would have. Sound economics demonstrates that recessions/depressions end on their own, but most people impatiently demand government “do something,” however, it was government action which prolonged the Great Depression for a decade. Among the mistakes by the Hoover and Roosevelt Administrations:
(1) Smoot-Hawley Tariff of 1930 – European countries retaliated with their own tariffs and made all Transatlantic trade costlier, thus further reducing employment.
(2) The Revenue Act of 1932 – Increased tax rates on “the rich” , i. e., those who create, grow and expand businesses through personal wealth or their purchases. Anyone familiar with the consequences of the 1990 Luxury Tax will understand the devastating consequences of this Act.
(3) Roosevelt era tax increases through 1936, which expanded (and magnified the problems) what Herbert Hoover had already done.
The massive tax and spend policies during the ’30s led to post-WW2 inflation, which significantly increased the cost of doing business in the United States. And we all know what the consequences were. They are with us to this day.
As Marx correctly pointed out Capitalism eventually ends in Feudalism or Communism… depending upon the police force. The depression ended because Hitler started to colonize the rest of Europe.
“sound economics”? What the heck is that? Economics is a theory about how goods and services should be distributed in society…. there is no right or wrong economics.
I agree, whoever has the military has the power no matter the -ism. Can’t happen here? Let things get really bad and watch how fast those tanks roll.
Why does “Homeland Security” have virtually unimited power??? So things CAN’T get out of control.
What was it they called Homeland Security in 1936 when Roosevelt was President?
Oh yeah.. The Gestapo
Has anybody remembered from their education experiences the big Feudal powers of the earth and how they were at one time a big Capatalist power and they failed.
Or the The Communist regime of the Early 20th century that was a big capitalist power of the 18th and 19th centuries and now are flourishing in the Karl Marx Utopian model?
Only in Bizzaro world.
That would be “Capitalist” fat fingers rule the day
KCdad new profile update : Utopian, anarchist, anti government, anti garbage, pro consultant, Historical revisionist.
FDR did not have Gestapo forces in the USA that was another country for the record.
Capitalism and Marxism/Socialism both involved the centralized control of the means of production by a monopolistic corporate structure that is going to be hell bent on preserving its controlling status.
This is why you have the “Capitalists” at Goldman Sachs hosting a weekend with the Marxists/Socialist Barack and Michelle at the Hamptons over the 4th of July weekend.
Free Enterprise or Free Markets is something neither the Capitalists or Marxists want.
And, please stop bashing the Chinese. If you ask them, very few Chinese are Socialists. There is less socialism in China that in the US as the Chinese govt does not provide a social safety net for its citizens…….party members yes…citizens…no.
“Sound economics demonstrates that recessions/depressions end on their own”
Yes they do. But the ending isn’t always what one expects. It isn’t pre-ordained to be a happy ending for anyone in particular. Nations do not have to recover, while others benefit at their expense. Whole civilizations can disappear. Revolutions can ensue bringing down the old ruling elites to put forth a new ruling elite. Poverty and decline can last decades before the economies recover on their own.
Government interventions seek to have some control over events. Sometimes they work. Sometimes they don’t. Some policies work better than others.