Wednesday, October 21, 2009

Quick thought on the current state and future of capitalism


Capitalism is in trouble. But not because of what it is, but rather because of what it is perceived to be. Too many people today blame the crisis on capitalism, when in reality it has been the government's butchering of capitalism that has created the problems. Gross government intervention in an attempt to control the natural business cycle, fight recessions, inflate credit bubbles, and artificially postpone economic contractions has brought us to the brink. A collapse is definitely inevitable and the worst is still ahead of us. The depression that should have been allowed to run its course and cleanse the imbalances and malinvestments in the system (such as an overbloated finance sector) might have been postponed for now, but it will only come back and attack us with a vengence some point in the future...and this could be the final nail in capitalism's coffin, once politicians and the public once again resort to blaming "speculators", "greed", and capitalism. It's a Marxist's dream come true. Currently the economy is on government life support, and the government has become the final "safe" haven- the only entity left that is capable of artificially and temporarily shielding the economy from a severe depression (more recent safe havens manifested themselves in the form of the Nasdaq bubble, which collapsed in 2000, and the housing bubble, which collapsed in 2007. Once the government runs out of ammunition and oxygen, something inevitable since a flawed and dishonest system of debt-sustainence can only last so long, the ultimate collapse will occur.

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