For years, proponents of capitalism have been flooding the media with their passionate arguments about the basic tenet of capitalism - "Government has no business to be in business"
And look at things happening now, in US as well as elsewhere. Government has stakes/being asked to have stakes in as bizarre a business as investment banking!!
Most recent is our own country is the demand by real-estate developers for govt. help!! The same guys who had borrowed heavily just because they could charge anything for the houses they made and justify the same on another 'logical' basis of demand-supply issues.
It is appaling that even the most educated of the lot who pooh-pooh capitalism forget that 'free-market' capitalism is crony by its nature and if let free, would run over anything and everything.
A good comparison with the real-estate bailout is the case of farmers commting suicide under the burden of loans (and which is not because of a business plan gone bad, but because of the unfortunate dependence on monsoons). The the loan-waiver attracted so much criticism from the economists of the country on the basis of growing fiscal deficit etc etc. But the same people seem to have gone underground now. Even if the argument is reasoned as that a default by real-estate firms will trigger a systemic collapse of the financial system, this brings another big question with it, that of inclusion of all strata of the society in the economic growth. Do suicide-commiting-farmers form such a unimportant part of the economy of the country?
In this whole debate of govt. vs market argument, it is funny that the government is treated like an entity which exists in isolation. It is forgotten that government represents the will of the citizens and can not be considered just as a bureaucratic machinery(though I wish, real life govt. were better than this). In free-market, amongst the two inputs for production viz. labour and capital, labour is subservient to capital, forget being equal. Labour is just a statistic minus any human element!!!. This is only acceptable in the realms of an extreme version of the Darwinian theory.
This needs more thought, as absoute goverment control has not provided results elsewhere in the world and the slightest thought of such a system sends a shiver down my spine given the kind of govt. I see in my country.
Think, Think, Think.
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