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Daniel Johnson: Here we are in the institute of Economic Affairs, this shrine of the free market, which is now under fire in a way that it perhaps hasn't been for a generation or more. Once again people are questioning the morality of capitalism, and they are even invoking the name of Marx, and those who are doing the invoking even include people like the Archbishop of Canterbury. Is this a good thing, or is this a bad reversion to old habits?

Samuel Brittan: I think that Marx is, to make a bad pun, a red herring. It's just become a shock-horror name to invoke, and I'm not shocked, but not that interested either. I've often wondered what Keynes would be saying now, I've never wondered what Marx would be saying. "Marxian socialism must always remain a portent to the historians of opinion - how a doctrine so illogical and so dull can have exercised so powerful and enduring an influence over the minds of men, and through them, the events of history." That's Keynes on Marx.

Edward Hadas: I think, as Sir Samuel says, quoting Marx is more of a cultural statement - like wearing a Che Guevara T-shirt - than an intellectual statement. There's a certain kind of perverse contradiction of reality. This very successful economy is identified as a failure again and again. Rowan Williams is just one of many people who look at what has to be considered, by pretty much any objective standard, a hugely successful economic experiment in modern times, and says, "No, no, it's a failure." When Marx made the claim, or, say, when Malthus made the claim that we were all about to be starving to death, at least a reader could reasonably say, "We haven't tried it out yet but look at the terrible squalor of industrial cities and the rapidly-growing population - yes, the system is working terribly and it's doomed to failure." There was a prediction, and there was a case - it may not have been a very logical one - but it has been firmly, thoroughly, completely disproved. And as for Marx's own version of the modern industrial economy that he planned out, we've given it a fair shot, I think. It's also been a failure.

DJ: Despite the unquestionable success of the market economy, doubts do still remain about its morality, and the present crisis has brought these doubts to a head. I'm not just thinking of this as an epiphenomenon of the crisis - it's having a direct impact on the course of events. So, for example, American members of Congress worry that their constituents are so angry with bankers that they will vote them out of office if they bail out the bankers. So they won't bail out the bankers, and this has an immediate impact on the stock markets. A moral view about the system or the individuals that work the system is directly relevant. It's having an impact every day.

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November 17th, 2011
8:11 AM
"The inflationary boom thus leads to distortions of the pricing and production system. Prices of labor and raw materials in the capital goods industries had been bid up during the boom too high to be profitable once the consumers reassert their old consumption/investment preferences." However: "The period prior to the crisis was the most stable economic environment for generations. And, unlike most previous recessions, this crisis wasn’t preceded by an unsustainable boom in output. In the five years leading up to the crisis, overall GDP growth remained close to its long-run average and inflation differed from the 2% target on average by only 0.2 percentage points."

Josie Nguyen
December 15th, 2009
5:12 PM
Why is it that people always want to blame anything and everything such as 'the government' or 'the market' when in fact it is their own individual failure that causes harm to society. Greed is distinctly individual, not caused by the market or by the government. Government in a democratic society must respond to their electorate's stupid demands (such as easy credit to flip houses) based on individual greed. If there are enough stupid people among the electorate, they will form a majority that pressures government to act. Governments simply act democratically by responding to the majority pressure. Markets simply act to respond to the majority demand. Let's stop wasting our time finding faults with the market or the government. People, individually, are responsible for the current crisis, crises in the past and more crises to come.

Riaz Ahmad
December 27th, 2008
9:12 PM
It is rather strange that only since the international financial system went in to a free fall, hurting the western economies, the moral aspects of capitalism are being questioned. When it happened in East Asia, no one battered an eye lid in the west. Capitalism has been robbing the poor of the third world for centuries, no one in the west felt any need to question its morality. As usual, hypocrisy lurks in every nook and corner of west's dealings with the rest.

November 24th, 2008
1:11 PM
Nobody is interested in filling my pockets with money. Or yours. The transactions that have brought about the financial 'crisis' have been made by people hoping to make a profit. Pie in the sky economics, balloons that will pop; and all on a 'global' scale. There have been many warnings but to no avail, and while bitter medicine is being prescribed the conmen continue to prosper -- if you are silly enough to listen.

November 11th, 2008
4:11 PM
I would urge readers to read this essay by Rothbard which is timeless and the lessons of which we would do well to heed. It is worth noting for those who listen to Sir Brittan's comments that there is nothing free market about the pound, or interest rates, or fractional reserve banking... these are all creatures of the state and the interested observer will notice they happen to be all intricately involved with the current crisis. We do not have a czar fixing the price of oil or bread yet we seem to think it reasonable that we have a central bank fixing interest rates. We do not find it strange that our currency is backed by literally nothing, an experiment that has NEVER endured in history and has so far only been running since 1971 in which time, unsurprisingly to any follower of the Austrian school, levels of debt have exploded to unprecedented levels on nearly every relative measure one can think of. Fractional reserve banking in a private money world would have limited the expansion of credit but in a state backed, incompetently regulated order, we have seen former lions such as RBS end up with assets of 93 times its tangible equity at the end of 2007. (!) None of these features are a result of the free market and it is apodictically incorrect to blame it, the market responds to the institutional framework within which it works. In this case, infinitely elastic credit. Without fiat money and a fractional reserve banking system backed by central bank determined rates and implicit government guarantees of the banking system, we could not be in this mess in the first place.

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