[I have been focussing on developing some models of how money works, after the manner of Steve Keen in The Roving Cavaliers of Debt. Until I get through that, here’s a vignette.]
One John Poole has been conducting a personal defence of “capitalism” in the Letters section of the Canberra Times. His argument is basically that markets always sort things out, that a system with markets is, necessarily, “capitalism”, and that anyone who disagrees is a socialist. Here is my own letter in response.
I hope self-appointed defender of “capitalism” John Poole read Paul Krugman’s account of current American capitalism on the Opinion page opposite his letter (Red Whiners, 18 Oct).
Poole’s simplistic division of the world into capitalists and socialists is a false dichotomy. Market economies can take many forms, some successful and some not, and destructive greed can manifest in market or non-market economies alike.
The most successful economies in recent history were the mixed economies of the nineteen fifties and sixties, when governments routinely intervened substantially in markets. Bob Menzies would be considered a raging leftie by most of today’s pollies, if any of them had the wit to remember or learn about his policies.
In contrast, Paul Krugman portrays modern American capitalism as lacking the fundamental requirements of well-capitalised banks, competent market supervision and effective contract enforcement. As a result America is being hollowed out by a predatory financial sector, and the disastrous consequences are far from over, for Americans or for us.