Corporate Capitalism and Free Enterprise systems are not synonymous. The former rejoices in oligarchy. The latter detests it.
What made the US
great for much of its history was a belief in its own exceptional destiny, its
flexible labour market, high degree of innovation and its emphasis on
individual freedom. It is also was motivated by a culture of self-reliance that
eschewed the class structure of Europe. The country has a market economy and it
is this adherence to free markets that have generated the wealth that underpins
the success of the nation. The same is true of Hong Kong and Singapore.
So why do free
markets work? Essentially they provide through the price mechanism immediate
feedback that allows supply and demand of goods and services to reset in a
timely manner to a new equilibrium situation. Excessive regulation, price
controls and government interference (well intended or not) needlessly
complicate the resetting mechanism resulting in shortages, price hikes and
unstable situations.
The market aggregates
knowledge in a far better way than any committee of elites or central planning
forum could ever hope to do.
This does not mean of
course that there isn’t a role for government on the economic front but its
main purpose should be to provide a legal framework that will facilitate market
economics, ensure competition and sustain a level of spending to adequately
protect the most vulnerable in the society by providing necessary services.
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