Quote:
Originally Posted by loquitur
The problems with capitalism usually arise from government interference. Beyond providing basic infrastructure (such as courts, law enforcement, defense and a money supply), most govt'l interference is, with the best of intentions and with a desire to help, deleterious. There are a number of reasons why this is so, starting with inability to get complete information from a remove; inflexibility of structure once implemented; free-riding by political constituencies; lack of market or other consequential discipline for the decisionmakers; disregard of moral hazard; agency costs; failure to prioritize outside crisis; one-size-fits-all decisions, etc etc etc etc. The bottom line is that govt is just not well-equipped to make economic decisions or forecasts. That doesn't mean the govt is incapable of doing some good things, but as a general rule the less involved the govt is in the economy, the less distortion there is. And that applies to everything from health care to real estate.
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I disagree. I think government interference (code for regulation) is required to keep a capatalistic society healthy. Capitalism is great for maximizing profits. Pure, unfettered capitalism is great if you want a society that looks great on the quarterly basis - profits are up! But I think it's safe to say that money isn't everything. Profit should not be the end goal of society. There are other things that people want. Clean air. Social mobility. Safe working conditions. To have these things, capitalism must be tempered with common sense, and, yes, regulation.
Clear, simple, efficient regulation, to be sure. But without limits, capitalism would tear our society apart.