“Childhood disease” of the leftism in capitalism
Journal of European Economy, Volume 9, Issue 4, December 2010, pp.395-407
|JEL: G1, G38||Full text (PDF)|
The global financial crisis affected not only the world economy but also the economic system as a whole. As is well known, all the problems of market economy should be solved by Adam Smith’s «invisible hand». In addition to the invisible hand of A. Smith, also there is an invisible hand of the Friedmans, which acts in the reverse direction. We proceed from the fact that the Friedmans meant not only corruption. That specific interest implies that the government should save people and corporations who had been economically gambling and gambled away. Anyway, they make pay not those who gambled away, but common tax payers. As a result, the businessmen who dishonestly behaved now can start their gambling again. They forget that the 2008–201… financial crisis was initiated by moral hazard provoked by intervention and «support» of the government. And, accordingly, «the crisis of surplus production» was replaced with «the crisis of surplus financing». Global economy really needs new rules providing for a new role for international and financial institutions. We need the economy «with two hands».