| | |  Editorials | Opinions | March 2009 
Capitalism in Ruins
 André Pratte - La Presse
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| | André Pratte for La Presse and Christine von Garnier in Le Temps argue that capitalism has to be reinvented and controlled. (Hermes-Press.com) | |
The fall of the Berlin Wall consecrated the triumph of free market neoliberalism over its toughest ideological rival. The whole world was to become capitalist, in one way or another, from Dallas to Shanghai.
The capitalists were bad winners. They pushed their system to the extreme, that is to say, to excess. Outrageous risks, gargantuan appetites, crass incompetence and arrogance, brazen frauds have marked the last decade - until the temple's columns collapsed.
Today, the very same actors who preached lean government are begging governments to come to their rescue. The automobile industry alone says it needs a lifesaver of $40 billion. And as staunch a free market apostle as former Federal Reserve president Alan Greenspan wants the temporary nationalization of certain banks.
The stock markets' reactions to the gigantic recovery plans governments have implemented suggest that investors want still more. That is, that they want recovery to come from the government and for the latter to assume all the risks. What sissy capitalists we have there!
When French President Nicolas Sarkozy started to talk about the necessity of "restructuring capitalism" in September, many people smirked at the outsized ambition he expressed in that formulation. Yet that's precisely what will be necessary.
In spite of its weaknesses and its pernicious effects, capitalism has proved itself. To paraphrase Churchill on democracy, it's the worst economic system there is, with the exception of all the others humanity has tried. That's why those who believe in free market economic liberalism - beginning with our political leaders and company heads - must knuckle down to the necessary reform.
Nothing is more troubling in the present rout than the multiplication of abuses at very high levels. The Stanford affair followed the Madoff affair. The leaders of a company as respected as Research in Motion (manufacturer of BlackBerry) have just paid the American Securities and Exchange Commission fines totaling $1.4 million in an options backdating case. For its part, the great Swiss bank UBS has acknowledged responsibility for "irregular activities" that arose in transactions with American depositors. According to Washington, UBS lured its clients by asserting that they could escape the IRS.
It's the state that has revealed these abuses, the state that will allow economies to recover, the state that will absorb the shock its citizens have undergone - financial losses, unemployment. As quid pro quo, governments will want to strengthen their controls over the economic system. In the medium term, that will damage the economy's efficiency.
As totally contrite and docile as they may be today, the capitalists will soon come to complain about the weight of the laws, the regulations, the bureaucracy. Nevertheless, their credibility will be nil. And they will have only themselves to blame.
Translation: Truthout French language editor Leslie Thatcher. |
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