Premature triumphalism, judging from some of the comments.
More: The truth is that markets and corporations are not good or evil. They are machines, often very powerful and useful machines, but no matter how well you build them, they are run by human beings, and they are thus subject to the frailties of their designers, owners and operators. Only a think tank economist could be surprised to discover that business people are venal more or less in proportion to the general population...
Market worship goes way beyond the belief that private property and open economies can do the most good for the most people, or the assumption that there is a moral quality to economic freedom...A corollary of market perfection has to be the undesirability of nonmarket forces, especially in the form of government. Whatever else was driving the anti-government fervor of the late 20th century, the certainty that markets always knew best was part of the equation.
You can read the rest after the jump.
The end of market worship?
by Edward Cone
News & Record
7-7-02
So the latest iteration of the old boom-and-bust story has reached the part where a few people get led away in handcuffs, while the legal crooks on Wall Street slink into the background until the next promotional cycle begins. The plot is timeless even as the details change with the decades.
This time it was supposed to be different. This was the millennium of the market. That may yet prove true in some ways, as the market economy is not about to join communism on history's ash heap. But things look depressingly familiar here in the era of capitalism triumphant. America's near-religious faith in the magic of the market has been revealed as idol worship.
The truth is that markets and corporations are not good or evil. They are machines, often very powerful and useful machines, but no matter how well you build them, they are run by human beings, and they are thus subject to the frailties of their designers, owners and operators. Only a think tank economist could be surprised to discover that business people are venal more or less in proportion to the general population. Certainly this is not news to anyone who has ever spent time in close proximity to an actual business.
Market worship goes way beyond the belief that private property and open economies can do the most good for the most people, or the assumption that there is a moral quality to economic freedom. Even the no-more-business-cycle claptrap of the Internet bubble was just an offshoot of the ideological view of markets that took root in this country during the '80s, flourished in the '90s and was last seen buried beneath a pile of worthless WorldCom shares.
The greatest impact of this market cult has not been on the economy, which is, after all, treading a beaten path, but on politics. A corollary of market perfection has to be the undesirability of nonmarket forces, especially in the form of government. Whatever else was driving the anti-government fervor of the late 20th century, the certainty that markets always knew best was part of the equation. That is the reality that may be altered by the current crisis of faith.
Earlier indicators of capitalism's imperfection led to increased regulation and government action, such as the anti-trust laws aimed at the monopolistic excesses of the Rockefeller era. Franklin Roosevelt reacted to the mess left by the crash of 1929 with reforms that included the establishment of the Securities and Exchange Commission (with FDR famously saying of its first head, Kennedy family patriarch Joseph Kennedy, "Set a thief to catch a thief.")
The nation hardly seems prepared for a big swing to the left or the imposition of severe regulation. But that doesn't mean that corporate crime won't have repercussions. An anti-business backlash could have implications for everything from environmental policy to health care and tax law. It might color the next few elections. Judging from the volume of the criticism of corporate crooks now coming from the White House, President Bush sees the danger.
Already in New York, an ambitious attorney general named Eliot Spitzer has made himself a star by successfully taking on Merrill Lynch and rattling his saber at other corporate miscreants. Last week, North Carolina treasurer Richard Moore joined officials from California and New York in demanding better behavior from investment banks doing business with their states.
One big winner in a public reassessment of market theology could be our own junior senator, John Edwards. Trial lawyers and corporations are mortal enemies. If big business loses the high ground and trial lawyers are seen more as regulators of the powerful than as parasites of the productive, Edwards could go from off-year media darling to legitimate national figure.
Americans like capitalism, but they recognize that any machine is subject to operator error. Even if markets are self-correcting over time, punishing Enron, Tyco, WorldCom and the ones we'll read about next week or next month, justice will come too late for many investors and employees. That doesn't feel right to a lot of people, and it will have to be addressed.
The party that figures out how to balance human greed with human oversight, so that markets are both free and fair, will be the winner on this issue. Market capitalism will prevail, but the cult of the marketplace is a relic of another time.
© News & Record 2002
Edward Cone (www.edcone.com, [email protected]) writes a column for the News & Record most Sundays.
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