Someone asked me recently, “If this is capitalism in its purest form, then what does that mean?”
What a great question I thought. If we have been free-market, unregulated capitalists and realize that it has given rise to a financial crisis of mass (wealth) destruction what does that tell us about our political economy? And as a follow up, does it mean that we are at a turning point in our political economy? That sounds like a big deal to me. So big, that it is hard to write about.
And I know that we have tripped over ourselves many times in the short economic history of humankind, yet life somehow went on. Yet I also realize that every system has a point of irreversibility. No system is so robust it cannot be broken. If there is one take away from history, it is that no person, or organization, or company or government is irreplaceable. As Keynes said so bluntly, “In the long run, we are all dead.”
I have no idea what the long range implications of this fiscal crisis are for our political economy. Nor do I think any intellectually honest “expert” has any concrete predictions on the consequences of action or inaction. But I do sense that we are in the land of “fat tails” – where the dragons are… and predictability is nonexistent.