Tuesday, October 21, 2008

The changes being made for this crisis will not really change our economic system

There have been many, particularly in the US who have screamed that the introduction of government money into banks and a share of ownership means Socialism. This is not correct. Socialism requires long term ownership of all means of production and distribution as part of the economic system of a country. What is being done now is simply the injection of government money to sustain the current capitalist system and this will be withdrawn when the businesses are stable. Just as the New Deal did not mean socialism, neither does this. Furthermore, in US history, full nationalization even by President Eisenhower, is not uncommon as a temporary solution.

As we emerge from the current economic crisis, however long it takes, we will return to a strengthened private enterprise system in which regulation is more balanced. The only danger is that there will be an overreaction in which the law of unintended consequences could have reign.

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