A sad, sad point of view

This article, written by Joseph Stiglitz really bums me out if true. Not his "points" about capitalism, but that are so many in the world who delude themselves into believing his essential premise: that so called American "style" capitalism has become a proven failure to much of the third world.

The fall of the Berlin Wall, in 1989, marked the end of Communism as a viable idea. Yes, the problems with Communism had been manifest for decades. But after 1989 it was hard for anyone to say a word in its defense. For a while, it seemed that the defeat of Communism meant the sure victory of capitalism, particularly in its American form. Francis Fukuyama went as far as to proclaim “the end of history,” defining democratic market capitalism as the final stage of social development, and declaring that all humanity was now heading in this direction. In truth, historians will mark the 20 years since 1989 as the short period of American triumphalism. With the collapse of great banks and financial houses, and the ensuing economic turmoil and chaotic attempts at rescue, that period is over. So, too, is the debate over “market fundamentalism,” the notion that unfettered markets, all by themselves, can ensure economic prosperity and growth. Today only the deluded would argue that markets are self-correcting or that we can rely on the self-interested behavior of market participants to guarantee that everything works honestly and properly.

Wow. How can a seemingly intelligent person make so many mistakes? An aside: we need to, as a civilization, learn how the "other side" thinks. Because this guy's thinking, in my estimation, is fundamentally flawed.

First, Communism is anything but dead. Second, there will never be an "end of history" as described by Hegel, Marx, et al. Societies will always experiment with differing forms of government, trade, monetary policy, etc. Third, our markets were anything but "unfettered". Freddie and Fannie were specifically instructed to buy up billions in subprime loans. Also, I would dispute the notion that American-style capitalism is about "unfettered" markets. That can mean different things to different people. A zero-regulated economy is not capitalism, it is anarchy.

Stiglitz throws out the baby with the bathwater in this article. Or rather, he suggests everyone but the deluded have done so. Count me among the deluded then. American capitalism continues to evolve. We're going through a financial crisis now that we can learn and grow from. But we can't do it by lying to each other and ourselves about the who, what, and how of this mess.