As Half the World Marches Toward Nationalization, the Other Half Marches in the Opposite Direction

Almost any one of the massive failures/interventions/takeovers of the past several weeks — Lehman/A.I.G./Morgan Stanley/Freddie and Fannie/G.M. and Chrysler — would typically be enough to dominate the news for months. As it is, however, such stories are arriving nearly daily.

With this many extraordinary events, some otherwise major stories aren’t landing with the gravity they might deserve.

Consider, for instance, that in the same Saturday edition of The Times which reported that the Bush administration planned to “inject capital directly into the nation’s banks — in effect, partially nationalizing the industry,” it was also reported that “Chinese leaders are expected to allow peasants to buy or sell land-use rights for the first time, a step that could draw hundreds of millions of farmers more firmly into the market economy, now centered around the cities.”

And, just for good measure, Iran is trying to collect sales tax for the first time.

As half of the world marches toward nationalization, the other half seems to be marching in the opposite direction.

Perhaps we can all meet at a Starbucks to discuss.

The pace of change is startling, thrilling, and exhausting. And oh yes: on 20 of the past 22 days, the U.S. stock market has gained or lost more than 3 percent.


gws

I honestly don't mind about sking color but about the spirit of the candidates. One of them is going to rule the country so we better choose right. www.goodwave.com

Sviergn

@15:

"An evangelical will tell you that gay marriage is bad because marriage is a sacred rite established in the Hebrew and Christian scriptures."

And? So?

Thanks, you just proved my point. Why should other people's religious beliefs have an effect on how I or anyone else chooses to live? Does your religion trump other people's beliefs? Why, because there are more of you? That's exactly what the Constitution protects us against.

You complain that you are asked to change your religious beliefs, but of course this is not so. Your religious beliefs just are not a defacto default that others must live by. That's all. And that's as it should be. Is acceptance of people with other beliefs and lifestyles an example of your being "forced" to do anything--besides realizing that you share the country with others who have different beliefs than you do? If co-existing with gays is a problem for you, what about the Jews? The Muslims? The atheists? Tell us, do.

I said that an evangelical response to the question of why gay marriage is "wrong" would be inconsequential and unsubstantiated. A response that "my Bible says it's wrong so it is" qualifies as such. Like I said, in a country where there is freedom of religion (and FROM it as well), quoting the Bible to prove something or to claim it should be the law of the land has no merit.

Anyway, back to the actual topic. It was not presumption that Allende and his regime were demolished, that Bolivia today is still marred by interventionism, that US policy turns countries like Venezuela away from us and against us. You ask "who picks them" (referring to the "planners") - let's reframe your question: who picked the ones who led us into this black hole of financial meltdown? All this talk of "maximizing freedom" from the apologists for the so-called free market: freedom for whom, to do what? Basically, it is not freedom for people, it is freedom for corporations and their officers to act with impunity, to be immune from accountability for product defects and for deceptive advertising, to be exempt from regulations that human beings are subject to.

Although you dismiss it as "feeble sloganeering", my argument is that unfettered deregulated business is anathema to an economic system supposedly intended to provide for the best interests of PEOPLE, not for the best interests of itself and its beneficiaries.

Do you perhaps not agree with that principle? Do you believe the system exists to benefit people, or the other way around?

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Sviergn

@17: My family has had plenty of "actual experience" with Communism. We just don't think in binary black-and-white dichotomies like the capitalist heroine Ayn Rand: "Communism was bad, therefore any collective efforts are bad and being selfish is good!" What did I deride as "science fiction?" - the so-called literature of Ayn Rand. I happen to love science fiction, so I don't understand why you think I would use it as a term of insult. I simply recognize it for what it is - a form of fantasy writing that is not about our actual world literally but tries to work as metaphor. Ayn Rand fans like Alan Greenspan took her plots literally, believing that they described the real world. They do not, and imagining that they do is a fallacy not worthy of a philosophy that would call itself "objectivism." Which profound thoughts were you refering to? That the "self-made" man borne of privilege is the most noble character? Our economy's problems stem in part from Greenspan's belief that Atlas Shrugged represented a reasonable attainable ideal in the business world. Derivatives were not a problem because he could count on the honest businessmen to regulate themselves and not be too greedy? Uh duh, what happened? LOL!

As for vicious systems, I ask my question again: can capitalism actually compete fairly and honestly with other systems like socialism, or does it need to bully, coerce, deceive, delude, distract, and use force to topple its competitors? Historically, we note that it is the latter. No one responding to my comments has addressed that legacy. Instead, we see... the very kinds of tactics one has come to expect from capitalism. Don't we?

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steve pesce

The pace at which our government is letting Wall Streeters steal the taxpayers blind is startling. The truth is that we need a taxpayer revolt against the congress and presidential candidates for pushing the bailout through without even one single public hearing. It's taxation without representation. And we need to take our government back and do away with the two corporate parties.

Allen

Compare the advise from the west during last decade's Asian financial crisis with the response to the current crisis. It's a topsy turvy world.

armchairpunter

An evangelical will tell you that gay marriage is bad because marriage is a sacred rite established in the Hebrew and Christian scriptures.

The institution of marriage has maintained state recognition despite the gradual disentanglement of church from state over the course of the last 100 years or so. In reality, the state action and the religious rite are two separate phenomena. If you're asking for state recognition of unions between gays, together with the statutory benefits and responsibilities that relate to marriage, this evangelical suspects he would not be alone among evangelicals in wishing you well. If, however, you're asking for a change to my religious beliefs, including the moral teachings that have been observed by Christians for millenia, I am going to decline your request. If you wish to call those beliefs feeble, you wouldn't be the first.

Don't make plans to dance upon the grave of capitalism yet. You can't rightly critique its efficacy without accounting for the impact of state intervention, of which there has been plenty relevant to our current crisis. I find uproariously funny your pre-emptive assertions that it was capitalist aggression that doomed otherwise successful collectivist regimes.

More importantly, the efficacy of the capitalist system is a subordinate justification to its maximization of freedom. Remove the price mechanism from society and planners (who picks them???) must control who buys what from whom at what price, who works for whom where at what wage and under what conditions, who gains what type of education, etc, etc. Those of us who prefer freedom accept the risk that our choices may lead to failure. We'll accept that failure over the opportunity for collectivist success.

Sviergn, all you've done thus far is feeble sloganeering rather than engaging in cogent argument. Watch out or some evangelical will come along and eat your lunch.

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gwern

#2: I'm not sure that question is even worth thinking about; I can't imagine how the Bush presidency isn't going to be covered at least as much Lincoln or FDR's presidencies. We're already buried under an avalanche of Bush books.

denis bider

Sviergn: If you had actual experience of communism, you would be aghast at the things you write. Communism most definitely did fall, and a vicious system it was, indeed.

In addition, your emphasis on "science" fiction, as if to insult, exhibits an ignorant dismissal of a field of literature which, at its most creative, has delivered some of the most profound thoughts ever thought.

Tucker

I think McDonald's is actually half way in between! As the somewhat globalized developed world partially nationalizes their financial sector the export driven emerging markets liberalize theirs, so an appropriate place would be an global brand that relies on one of those markets that has global and protected aspects. Coffee is actually a globalized market with less protectionism involved, fast food on the other hand has a suitably complicated relationship with host countries, suppliers, and welfare.

Puneet

@ # 2

I dont know how many books would come out on the current crisis; the question is ... would we have the money to buy them?

Sviergn

Bottom line on what we learned from this crisis - capitalism cannot compete! It can bully, it can use its bludgeoning power and force to topple other systems, but it cannot really compete on its own. How ironic is that?

Sviergn

@14: Of course I am stating things strongly. But their having been said in a strong tone of voice does not make them wrong. Historically, capitalism has shown that it cannot compete. History shows that capitalists feel the need to bring down competing systems by force, by assassination, by bullying, by any means necessary. Witness capitalist attitudes towards Latin American countries for decades now.

Socialism is dangerous, we are taught this, this is drummed into our heads, but ask the reason this is so and the answer you will get will be as feeble as an evangelical's response about why gay marriage is bad.

Communism did not fall, it was pushed. If capitalism were really about fair legitimate competition, there would be no CIA black ops to destroy democratically elected socialist governments because their existence posed a danger to the one true economic way. And there would be no demonization of socialism: capitalism would honestly attempt to compete with socialism and win on its merits.

But let's be honest: capitalism, engaging in HONEST competition! LOL! When will Greenspan and his fellow Randroids get the clue that Atlas Shrugged was a work of fiction! SCIENCE fiction!

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tom

@7 We seem to be entering an era of "disposable books". I.E., when Clinton was in office, an slew of "Clinton is the devil" books came out, to provide red meat to an angry conservative base. Are nay of them worth reading today? Most of them are really nothing more than rhetoric and baseless accusations.

The same goes for the large number of bush-bashing books out today. As the Republican and Democratic parties are both now competing to be seen as the least like Bush, he has already become irrelevant.

Bart

It will be interesting to see how many books come out about these times. From Carter and Clinton's pro-housing, pro-mortgage policies, to Greenspan and Bush's mistakes, Buffett's warnings about derivatives threatening our economy a few years ago, the fall of mighty economic titans, the complete and rapid demise/change of one of our most prized and glamorous industries (I-banking), nationalization, and the bailout plan's rejection, sweetening, and adoption, and the stock market's reaction to it all. And that's just the US. What's the over/under on number of books? 30?

Jan

i'm with the "other half". that's for sure.

Chris

@11, I think you might be stating things a bit strongly here. I think unfettered free markets are doomed to destroy their own freedom (monopolistic behavior, collusion, bubbles, fraud).

But I think that with just enough regulation and some government backing of "infrastructure" industries for which markets seem to create the wrong set of incentives, a "99%" free market can work well for everyone involved. Of course, at any point in the system where the government is involved, we need to consistently assess the costs and benefits of that involvement to the market and be willing to fix such problems.

Lee

Is it possible that a new economic model is emerging with the fusion or socialism and capitalism? China is nominally still a communist country but has tolerated or even promoted capitalism to spur economic growth. Why can the U.S. not bend its capitalism to curb excesses and make it work for the common good? The world is not black and white nor is it categorically divided between good and bad. The U.S. already has "socialistic" programs in place with social security, Medicare and a host of subsidies to industries.

It seems like this process is inevitable with globalization unless each country pursue a policy of autarky. Japan tried it to a limited extent but it did not work.

David Rasmussen

Smaller entities have stronger growth and create more jobs. Therefore, the U.S. government needs to encourage smallness. Put the power in a million hands instead of in one hundred hands and then we have something closer to free market capitalism.

The current status: big government is owned by "big money", and in return provides welfare for the rich.

To reform the system into true capitalism, phase in high taxes for entities with more than $10 billion/$1 billion/$100 million profits to provide incentive for big companies to split into smaller entities.

A major side benefit of this responsible economic policy is that no company becomes "too big to fail." The lobbying power of individual small companies becomes too small to continue to distort our government. No more bailouts. Ideally, no one asks for bailouts.

doc

That the financial service sector requires nationalization to "remain compettive" or more specifically, survive, is not a new phenomenon to the "free market" economic system known as America. The agricultural sector has been nationalized for decades, and it seems it want be ending anytime soon despite rulings to the

contrary by world trading organizations. So much for unfetted trade. Another neoliberalism hoax blown.

Alina

It was always the idea that to get to socialism you have to go trough extreme capitalism. that is what is happening to US, is finally moving to that place where canada and most of easter europe lives. on the other part is only then logical that china and iran would be moving towards a more capitalistic society and out of the feudalism they live in.

it seem that no matter how scare people are of the word socialism the manifesto was right all along, it's just that it came 200 years too early and was greatly abuse by power seeking men.