The free market apostates continue to battle the market. The corporate sector has beaten a hasty retreat. Credit, frozen globally, is being edged out by capital injections into various financial institutions. The realisation that freedom and the free market are not the same thing is slowly setting in, though many Republicans are getting desperate, seeking to equate cautious financial regulation with the evils of socialism (pandered by that "Arab" of curious ethnic heritage). And President George W. Bush continues to live with a curious historical unreality only he can comprehend.
While most G-8 countries, and many besides, argue that a supervisory, regulatory framework is necessary for any new economic order, the sirens of the free market continue to make neoconservatives dizzy. Bush believes that all states "must also recommit to the fundamentals of long-term economic growth - free markets, free enterprise, and free trade." (Radio address, October 25).
Bush commits the usual solecisms one has come to expect from the man in the White House: freedom is linked to open markets; prosperity to robber-baron initiatives and steals in an unregulated environment. "Open market policies have lifted standards of living and helped millions of people around the world escape the grip of poverty." Nothing could be further from the truth. The very basis of a successful economic order is not one that presses home the dogma of the open market but the restraint of a regulated one. One need not control everything, but a keen sense of oversight never goes astray.
No one worth his or her salt in the current economic crisis has advocated the hand of socialism to restrain the invisible hand of the free market. But some sort of global restraint has been urged. A revitalised British Prime Minister Gordon Brown has called for a summit of global leaders to re-script the workings of international capitalism. "We need a global way of supervising our financial system" (October 18).
Following in his footsteps is French President Nicolas Sarkozy, who has called for a new type of capitalism to invigorate the moribund system as it stands. Regulation and transparency must be encouraged. "Let us build a capitalism," he told the UN in September, "where ratings agencies will be subject to controls and punished where necessary, where transparency of transactions will replace opaqueness."
Wall Street luminaries and the puppeteers of the world market had a sharp intake of breath at the sound of these words. Conservatives in other countries were also terrified that such measures had a certain whiff of socialism. Czech President Vaclav Klaus, another convert to monetarist voodooism who should have been put out to pasture years ago, has a keen, if corrupted nose for these things. Sarkozy had to know "that his proposals and measures contribute strongly to the end of capitalism" (21 October). Such a financial crisis was merely the pretext for "irresponsible politicians" to impose an asphyxiating bureaucracy on the economy.
One wonders what planet of responsibility Klaus has been inhabiting for the last few years (a benchwarmer for the American Enterprise Institute, perhaps?). It is a place no doubt familiar to Bush. Should the President insist on his free market dogma come November at the international summit to be convened in Washington, he will find himself alone. Very alone.
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