Wall Street's Corruption and Lawlessness: Don't Blame Capitalism

by: Washington

When Mahatma Gandhi was asked what he thought about Western civilization, he answered:

I think it would be a good idea.

I feel the same way about free market capitalism.

It would be a good idea, but it is not what we have now. Instead, we have either socialism, fascism or a type of looting.

If people want to criticize capitalism and propose an alternative, that is fine... but only if they understand what free market capitalism is and acknowledge that America has not practiced free market capitalism for some time.

I'm not talking about Michael Moore's latest movie. I'm talking about worldwide opinion.

Specifically, a poll conducted by the BBC shows that the vast majority of people worldwide say that capitalism is not working.

The poll shows that:

Nearly a quarter -- 23 percent -- said the system is "fatally flawed."

RawStory describes the poll by saying:

Worldwide poll: Vast majority say capitalism not working...

Dissatisfaction with capitalism is widespread around the globe 20 years after the fall of the Berlin Wall that heralded the demise of European communism, a poll released Monday showed...

A bare majority, 51 percent, believed its problems can be solved with more regulation and reform, the poll said.

People pointing to the Western economies and saying that capitalism doesn't work is as incorrect as pointing to Stalin's murder of millions of innocent people and blaming it on socialism. Without the government's creation of the too big to fail banks, Fed's intervention in interest rates and the markets, government-created moral hazard emboldening casino-style speculation, corruption of government officials, creation of a system of government-sponsored rating agencies which had at its core a model of bribery, and other government-induced distortions of the free market, things wouldn't have gotten nearly as bad.

As Justice Louis Brandeis said:

In a government of laws, the existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipotent teacher. For good or ill, it teaches the whole people by its example. If government becomes a lawbreaker it breeds contempt for law: it invites every man to become a law unto himself. It invites anarchy.

If there has been lawlessness and corruption among Wall Street players, it was partially simply modeling the lawlessness and corruption of the Executive Branch and Congress members. I've written elsewhere about how the government lied by saying Saddam had weapons of mass destruction and was behind 9/11 (when he didn't and wasn't), that we don't torture (when we did), that we don't spy on Americans (when we did), etc. Just like kids model what their parents do as well as what they say, Wall Street modeled the unlawful and corrupt actions of our government employees.

Being against capitalism because of the mess we've gotten in would be like Gandhi saying that he is against Western civilization because of the way the British behaved towards India.

Note 1: I am not anti-regulation. I believe we need laws like Glass-Steagall, antitrust laws, fraud laws and other laws to ensure a level playing field. You can't have a football game without rules designed to keep the game fair. Same with capitalism.

Note 2: Maybe somebody can convince me that something else is a better system. I am open to listening to alternatives. But - to date - I have never heard of a better economic system than free market capitalism ... but if and only if it is truly free.