Badly Regulated Capitalism

Suddenly, as in a vindictive turn-around of a cheap movie, capitalism has become the rotten egg. There is a crime and there are suspects. It came from not having regulations, they claim.

I completely agree with the idea that market regulation is necessary (truth be told, even Bush has begun to realize that there is no other solution) and I believe that although the market, left to its own devices, will tend towards self regulation, it might still lead to situations which are undesirable as well as unsustainable. However, although I don’t deny the necessity of certain interventions from the dtate, I profoundly distrust those who spend their lives asking for them, and who cannot seem to live without them.

Let’s go to the facts. Capitalism, with more or fewer crises, represented an enormous civilizational advance in individual autonomies and freedoms. This pulse, which began with the renaissance, still beats alive today. The freest societies, those in which man is able to realize the greatest of personal, artistic and entrepreneurial achievements, are capitalist.

The alternatives have either resulted in unproductive anarchies (let us remember Robert Owen and his experience in New Harmony) or, more frequently, in violent dictatorships, capable only of distributing riches among their own oligarchies. These days capitalism is at work the world over, and if Europe or the U.S. happen to suffer through a crisis, it maintains its vigor, be it in China, Venezuela, or Angola. In countries in which the state intervenes completely in the economy and within the financial markets, the distribution of wealth occurs only among allies, friends, and affiliates of the respective regimes.

What has failed, then, within our capitalism? The answer was given in part by Miguel Sousa Tavares in his editorial last week: ethics failed, while greed and economic crime ran rampant.

Capitalism might work with more or less state intervention, but it shall regulate badly and be tremendously treacherous if it is not associated with the strict ethics which Max Weber spoke about in “Protestant Ethics and the Spirit of Capitalism”.

In this aspect, it was not necessary to come to the left in order to alert of the harms of capitalism – the Catholic Church has been preaching this for years.

It was not the market itself, nor even the absence of regulations which provoked the current crisis. It was the lack of common sense and extreme greed. Of course, these maladies are not intrinsic to capitalism, but to human nature. The crisis is a result, in fact, of a specific worldview and social organization. But, unfortunately for certain segments of the left, ones which cannot be resolved by their own remedies.