It's time for capitalism to grow up

[Chris]

It's time for capitalism to grow up asks a simple question and turns to Adam Smith for answer:

"Is free-market capitalism, as historically practiced in the United States, still alive, or is it now just a footnote in our economic history?

"Americans have traditionally believed that the invisible hand of the market means that capitalism will benefit all of us without requiring any oversight. However, Adam Smith never said that there would be, nor did he believe in, a magically benevolent market that operated for the benefit of all without any checks and balances."

The article elaborates on Smith and concludes, among other things:

"I strongly believe that capitalism has to grow up and become less naïve, relying less on a blind faith in the invisible hand and more on an understanding of human nature, including insights from the field of behavioral economics. It must include sophisticated checks and balances to make sure that the system is not gamed, instead of childish ideas about the inherent stability of the market."

The author also declares:

"We must have a second American Revolution. We must reclaim our economic liberty."

What kind of regulation is appropriate?

[Peter1469]

Very good article. One point on the 1987 crash: the "economic" activity that the article cites to was fraud. And regulators pointed it out and the Department of Justice successfully prosecuted and jailed over 1000 bankers in significant cases. God knows how many other cases were deemed not "significant." That has not happened after the 2008 crash.

[Conley]

Very good article. One point on the 1987 crash: the "economic" activity that the article cites to was fraud. And regulators pointed it out and the Department of Justice successfully prosecuted and jailed over 1000 bankers in significant cases. God knows how many other cases were deemed not "significant." That has not happened after the 2008 crash.

Agreed. It is a striking contrast and evidence of how much the nation has changed in the past twenty years.

[Conley]

What kind of regulation is appropriate?

I'm not sure, but I do believe that the laws already on the books need to be enforced, and done so equally. We can't have situations where companies can flaunt the laws because of a lack of oversight. The largely toothless SEC doesn't have the manpower to investigate and prosecute potential illegal activity like it should, and used to. Picking and choosing when to enforce the laws, when to prosecute, etc. poisons the environment and encourages more government interference by making the benefits of connections in the WH painfully apparent. The law as such should be the law, and it should be applicable to Lehman Brothers just as much as Goldman Sachs no matter who is in DC.

[spunkloaf]

Capitalism would be a fine idea for western civilization. We should try it sometime.