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Sunday, January 22, 2012

So, in summary, we get recessions because capitalism works.

James Hannam: Why Recessions Happen -- "... So, in summary, we get recessions because capitalism works. Capitalism generates economic growth. When things are good, human beings have a natural tendency to avert their eyes from future problems. But eventually we just have to roll up our sleeves up and carry out the necessary spring cleaning. The very worst thing we can do is pile up more debt, bring out new rules, raise taxes even higher and erect trade barriers."

1 comments:

Dr. Michael Bauman said...

I see his point, but I wouldn't say it in the misleading way he does.

Capitalism works. He's right. And human nature, fallen as it is, tends to foolishness, sloth, and ignorance. He's right again. But capitalism's success is not the cause of recession. It is the occasion for which human nature causes things to recede. Don't blame the market itself; blame those in the market who do not make the best use they can of market conditions and opportunities. The market works quite well. Those in it sometimes do not.