This summer I read Naomi Klein's The Shock Doctrine. It was intense. The Shock Doctrine shows how the driving force behind many recent political maneuverings have been about an economic showdown. One on side of the ring you have the regulatory Keynesian economic policies. On the other you have the unregulated free market policies of Milton Friedman.
Before reading this book, I was like "well, some regulation is good to protect the environment but welfare does not work, our school system has a lot of problems, and government is bloated and ineffectual." I said this from experience: I worked in government. However, reading this book made me realize that I wasn't thinking about the implied values of each system.
The private sector largely has one bottom line: Increase revenues.
The public sector also has a bottom line: Protect the health, safety and welfare of its citizens.
Is this a simplification? Yes. But at its core the difference is there. When push comes to shove, a company needs to either stay profitable or go bankrupt. Governments are built to answer to their constituents.
Klein uses the formerly-communist countries of South America as one case study. Under Keynesian (socialist) policies, these democracies were approaching First World status. People didn't want free market policies. The US had to forcibly replace democracies with dictators because no freely elected politician would sell out his/her people. These coups weren't about Cold War influence - it was about pushing through economic "reforms." (Also: note the language American media uses toward the contemporary socialist: Hugo Chavez)
With free markets, the poor got poorer and the rich got richer. The middle class vanished and things became very dog eat dog. As a whole, the country became more poor. That is what pure capitalism, without regulation brought to South America. Look around. It's happening here in the US too.
No comments:
Post a Comment