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Entry: Faith-Based Economy Link: http://www.takimag.com/blogs/article/faith_based_economy#20638 Post contents: The only thing remarkable about the Bear-Stearns "bailout" is that anybody should regard it as remarkable. Indeed, such gov't intervention is part and parcel of the history of capitalism. Capitalism (defined as absolute and unlimited ownership of property that has no social obligations) begins with an act of gov't violence (the seizure of the monastery and guild lands and the enclosure of the commons) and the power of both the capitalists and the govmint grow hand-in-hand. Pure capitalism has never been a stable system; from 1853 to 1953, the economy was in recession 40% of the time. Since then, that is, since the time of massive increase in gov't intervention, it has been in recession only 15% of the time. And the recessions were shorter and milder in this latter period. With all due respect to such neo-Austrians as Justin Raimondo (whose anti-war work I really do respect), there simply is no historical precedent for their views. Economic Austria and social chaos share a common border, and you cannot draw near to the one without coming close to the other. But when we draw near to the chaos, everybody turns to the govmint to avert the crises. Since the 80's, the rhetoric of Hayek has ruled the political and economic debate. But the results have been counter-productive. Every state that adopted Hayek's rhetoric has ended up with the opposite effects of those predicted: higher debt, greater gov't power, greater centralization, etc. This was true in Britain, the United States, Argentina, Chile, and all the countries that had Hayek-inspired "structural adjustment programs" forced on them by the World Bank. Now we have reached the point where we cannot pay our debts, nor fight our wars, nor meet our social obligations, nor even provide good jobs to the majority of our citizens, sure the minimum test for any economy. Bear-Stearns is simply another episode in the history of gov't intervention, without which the capitalist system would collapse of its own weight. But sooner or later (and I suspect sooner), the gov't runs out of tools and the system cannot be sustained. Sent at: 2008 08 08