Thursday, May 07, 2009

The Social Market Economy vs. Greed

This epochal crisis requires us to resolve the paradox of capitalism | Timothy Garton Ash | Comment is free | The Guardian

Capitalism will not end in 2009 as communism ended in 1989. It is too deep-rooted, too diverse and too adaptable to suffer such a sudden death. There are far more varieties of capitalism in the world today than there ever were of communism, and that diversity is one of its strengths. The rainbow reaches from wild west to wild east, and extends to major national variants of a market economy, such as China, that purists would say are not capitalism at all. So some versions of capitalism will weather the storm; others will be left in ruins or at least very substantially transformed.

An extreme 'neoliberal' version of the free-market economy, characterised not just by far-reaching deregulation and privatisation but also by a Gordon Gekko greed-is-good ethos – and fully realised in practice only in some areas of Anglo-Saxon and post-communist economies – seems likely to find itself in the latter category. But how about a modernised, reformed version of what postwar German thinkers called the 'social market economy'?

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