Monday, May 17, 2010

This if from an essay by Will Hutton in the Observer:

The great truth of capitalism is that it took off only once the European Enlightenment created the great institutions that kept it honest – the rule of law, a free press, accountability mechanisms, ways of forcing monopolists to give up their ill-gotten gains, creating competitive markets and elections. Before that there was tax-farming and the buying and selling of monopolies – rather as in China today. The Enlightenment offered the means, however imperfect, to challenge all that. The great mistake of the free-market revolution was to argue that all that was needed to make capitalism work was free, lightly regulated and flexible markets – and that institutions imposing ethics, transparency, accountability got in the way. We now know better.

I need to think about this. But the idea that capitalism is a product of the institutions that try to control it is interesting. I guess the argument would be, those institutions work to control the drive toward crisis that seems part of capitalism. Without them, capitalism might have destroyed itself by now.


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