Corrigan on Capitalism

Sean Corrigan actually cost me enrollments when I linked to him way back when... people said he had no idea what he was talking about.  He has been consistently right.  Here is a part of a recent essay... (autodownloads .pdf)  Upon a peak in Darien   (24.06.2014)

The Austrian treatment of the Bust as the true healing process which makes good the diseased structures laiddown in the Boom may be widely derided as 'Old Testamentmoralizing' or 'bitter-end liquidationism', but it issurely undeniable that, as Axel Leijonhufvud has longpointed out, in a slump we are weighed down by the'web of contracts' we all blithely issued when we assumedconditions would be very much more favourablethan they in fact turned out to be. The debt overhang isitself the problem – as oft-quoted Fiscal Keynesian Richard Koo has made a career out of highlighting and as thecurrent darlings, Atif Mian and Amir Sufi, hammerhome in their 'House of Debt'. From Solon onwards, Seisachtheia has usually proven thebest solution as is borne out by the many crashes andpanics which peppered the first century or so of largescaleindustrial capitalism (each in their own way a product of flawed monetary arrangements). These tended to be severe, but also short-lived due, in somegood measure, to the fact that debts were instantly extinguishedin an age before overly-intrusive central banking,ham-fisted fiscal policy, and well-intentioned - butoften suffocating - welfare nets encouraged everyone to cling to the wreck of their zombie enterprises and horribly sub-marginal investments.The individual misery may well have provided a familiar trope for the writers of Victorian melodrama,but it cannot be denied that such catharses did little to hinder the unprecedented raising of living standards for more members of a greater mass of humanity than ever before achieved. No, the business of perpetuating depressions and then fretting about ‘secular stagnation’was left to Roosevelt and his Brain Trust to pioneer and was simultaneously raised into a central pillar of economic dogma by the often Marxist followers of dear old Maynard.

Exactement.  Free markets brought the unprecedented wealth creation, capitalism introduced widespread usury and its apotheosis, lending credit at interest.  When our system comes down, let's recall that it was free markets that brought this unprecedented expansion of goods and service, and wealth defined as access to goods and services.

In free markets banks go bust.  Ouch.  But it is over in a day.  In capitalism the bust is stopped by bailouts with credit, and then the bubble is blown ever larger as wars, famines, stagnation rises.  Down with capitalism!

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