Bailing out the myth

Obviously there’s been loads of stuff about the current fiscal crisis but I think Michael Walzer hits the nail on the head:

The truth is that the invisible hand doesn’t always work, and so it requires some help from a visible hand—and that is the hand of the state. There is no other agency capable of protecting us from ruthless or reckless gain-seekers, for capitalist institutions too often reward both ruthlessness and recklessness. State regulation is, therefore, a necessary feature of—even if it is also a social-democratic addition to—the capitalist system. When regulation fails, we are all in trouble. Deregulation is the major cause of the current crisis. And the cause of deregulation is what? Well, we might say that the cause is greed, which certainly motivates political as well as economic behavior. But that won’t do, since greed was no less prevalent when the regulative regime, which we have been dismantling since the 1980s, was first put together in the New Deal years. The difference was that the political forces that believed in greed, and in the free market, and in the invisible hand, were less dominant then. The ideology of laissez faire had fewer true believers.

My view is that the free market is to some extent a faith-based ideology – after all, a completely free market isn’t desirable or even possible. It is as much a utopian dream as the Caliphate. That’s why the American government is giving seven hundred million to its wealthiest citizens when it apparently can’t afford universal healthcare. It’s the bankers’ fault, we should let them suffer – but we won’t. The myth has to be sustained – with your money, if necessary.

(Via Butterflies and Wheels, which has more comment from Ophelia Benson)


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