Capitalism is the superior economic model to follow in the world. The jury is in, the verdict was unanimous, and the outcome was never really in doubt. The great Adam Smith laid out the fundamentals of capitalism in his book, The Wealth of Nations. Having said this, the unregulated “laissez-faire” brand of capitalism currently advocated by libertarians and the right, and spelled out by Mr. Smith, makes certain assumptions that do not hold true in the real world. Primarily these have to do with human behavior and its effect on the functioning of markets. Boiled down to one simple factor, the theory ignores the impact of greed. There are other, more specific examples. But it would take too long to try to spell them out here. The upshot is that regulations, restrictions, rules, and the enforcement of these through both criminal and civil law are necessary to smooth out the otherwise vicious cycles of boom and bust. Failure to adequately regulate and control markets leads to the creation of oligarchies such as we see in Russia today, the onset of Depressions and Recessions, and the stratification of society into rich and poor with no middle class.It is important too to emphasize that the principles I have identified above are not revolutionary. They are what is now considered classical capitalist economics as it was taught to me in college in the mid-1970’s.
Capitalism is the superior economic model to follow in the world. The jury is in, the verdict was unanimous, and the outcome was never really in doubt. The great Adam Smith laid out the fundamentals of capitalism in his book, The Wealth of Nations. Having said this, the unregulated “laissez-faire” brand of capitalism currently advocated by libertarians and the right, and spelled out by Mr. Smith, makes certain assumptions that do not hold true in the real world. Primarily these have to do with human behavior and its effect on the functioning of markets. Boiled down to one simple factor, the theory ignores the impact of greed. There are other, more specific examples. But it would take too long to try to spell them out here. The upshot is that regulations, restrictions, rules, and the enforcement of these through both criminal and civil law are necessary to smooth out the otherwise vicious cycles of boom and bust. Failure to adequately regulate and control markets leads to the creation of oligarchies such as we see in Russia today, the onset of Depressions and Recessions, and the stratification of society into rich and poor with no middle class.It is important too to emphasize that the principles I have identified above are not revolutionary. They are what is now considered classical capitalist economics as it was taught to me in college in the mid-1970’s.