Yes, capitalism is working ... for the Forbes 1,000 Global Billionaires whose ranks swelled from 322 in 2000 to 1,426 recently. Billionaires control the vast majority of the world’s wealth, while the income of American workers stagnated.Something Trapped in Our Brains
Over the years we’ve explored the reasons capitalism blindly continues on its self-destructive path. Recently we found someone who brilliantly explains why free-market capitalism is destined to destroy the world, absent a historic paradigm shift: That is Harvard philosopher Michael Sandel, author of the new best-seller, “What Money Can’t Buy: The Moral Limits of Markets,” and his earlier classic, “Justice: What’s the Right Thing to Do?”
New free-market capitalism trapped in American brains. Yes, it’s everywhere: “Markets to allocate health, education, public safety, national security, criminal justice, environmental protection, recreation, procreation, and other social goods unheard-of 30 years ago. Today, we take them largely for granted.”
Examples ... for-profit schools, hospitals, prisons ... outsourcing war to private contractors ... police forces by private guards “almost twice the number of public police officers” ... drug “companies aggressive marketing of prescription drugs directly to consumers, a practice ... prohibited in most other countries.”
Yes, something is trapped in our brains, or rather the brains of Farrell, Harvard philosopher Michael Sandel, and those who think like them.
The first problem is Farrell and Sandel do not know what free market capitalism is. We certainly do not have it.
The free market would not have fractional reserve lending. The free market would have gold and silver as money.
The primary reason for the major disparity in wealth is bank leverage of fiat money created at will via fractional reserve lending. The most redeeming feature of capitalism is failure, but the Fed has a moral hazard policy of "too big to fail" that promotes massive risk-taking.
There would be no Fed in a free market and there would be bank failures, not bailouts on the backs of taxpayers.
In a free market, money would not be inflated at will, nor would credit be handed out to anyone who could breathe as happened in the housing bubble.
Anyone who equates what is happening now with "free market economics" has something much smellier than mush for brains. So does anyone who thinks the socialist model would serve us better. If the socialist model was better, and more regulation and rules were the solution for everything, France would be the booming leader of the world economy.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
