A New Capitalism is likely to emerge from the rubble, one which may well seem fairer and less alienating than the model of the past 30 years. The system's salvation may require it to be kinder, gentler, less divisive, less of a casino in which the winner takes all.Epstein says that the system we have had for the last hundred years is not capitalism at all:
[G]enuine capitalism was abandoned long ago in favor of a mixed economy - an unstable combination of economic freedom and economic coercion by government. Today's crisis, like the 1970s stagflation before it and the Great Depression before it, took place under, and is growing under, a mixed economy - not a free market.
Peston blames private enterprise:
Who's to blame? The short answer is all of us. But it's hard to mount a convincing argument against the notion that the most at fault were the banks and bankers - because they systematically failed to do what they were handsomely remunerated to do, which was to assess properly the risks of all that lending. Their survival as institutions now wholly depends on the goodwill of governments and taxpayers.Epstein blames the crisis on the failure of decades of regulation:
In fact, today's crisis illustrates the evils of government intervention in the economy and vindicates supporters of laissez-faire capitalism. The traditional, laissez-faire view of government, held by thinkers such as philosopher Ayn Rand and economist Ludwig Von Mises, was that the sole purpose of government was to protect individuals rights against force and fraud.
This purpose necessitates, in Rand's words, "the abolition of any and all forms of government intervention in production and trade." Laissez-faire thinkers explained how any and all of the supposedly moderate, progressive government interventions in the economy, from the money-printing Federal Reserve to government insurance of failing banks, were morally unjust and economically disastrous.
Peston thinks the solution is still more government interference:
But the biggest lesson of all is that we are a million miles from having created the political and regulatory institutions to help us to contain the risks of globalisation. If the unfettered movement of capital, goods and services is going to survive, if there is not going to be a retreat into national fortresses that could impoverish all of us over the longer term, we will have to find a far better way of monitoring global risks and of bringing governments together to deal with them.Epstein thinks the solution is laissez-faire capitalism:
To anyone who is unhappy with the direction the economy is going, take note: the free market philosophy has not failed-the unfree market philosophy has failed. Do your homework, speak up, and put the interventionists on the defensive.
Do you think that spending money you don't have, but that somebody else is going to have to earn, is a moral way to conduct economic affairs? Do you think that businessmen ought to be the servants of politicians? Do you think that forcing banks to make unsound loans is the way to cure a disaster brought about by government-induced imprudence? If not, read Alex Epstein's article in full (it is brief and clear) and follow his advice - if you do want to be free.