The redoubtable Seventh Circuit Appeals Court Judge Richard Posner (“the most cited legal scholar of all time”; “probably the greatest living American jurist”), isn’t afraid to call it as he sees it, and given Posner’s brains, experience, and economic cred as an antitrust expert, he may be more credible than your average, run-of-the-mill economist (“economists exist to make astrologers look good”).
The world’s banking system collapsed last fall, was placed on life support at a cost of some trillions of dollars, and remains comatose. We may be too close to the event to grasp its enormity. A vocabulary rich only in euphemisms calls what has happened to the economy a “recession.” We are well beyond that. We are in the midst of the biggest economic crisis since the Great Depression of the 1930’s.
In the late 1970s and early 1980s, the American economy was in crisis after years of stagflation. Mortgage rates were 17%, business loans carried 20% interest rates and productivity had collapsed. On April 21, 1980, Time magazine ran a cover story that asked the question: “Is Capitalism Working?” Today, the crisis that the American economic system faces is greater than that during the darkest days of stagflation. In this opinion piece, George M. Taber, former business editor of Time magazine and author of the 1980 cover story, asks and answers the same question — 29 years later. [Continue reading at Knowledge@Wharton]
Taber still agrees with the final sentence of his 1980 article in Time:
For all its obvious blemishes and needed reforms, capitalism alone holds out the most creative and dynamic force that any civilization has ever discovered: the power of the free, ambitious individual.
And, he warns that despite the pain inflicted by the boom and bust business cycle that is the downside of unfettered capitalism — pain that we are suffering from now –
well-intentioned, but unwise, changes in the nature of American capitalism could do damage that will be felt for decades .
I come across passages that I’ll share from time to time. I post them because they tickle my fancy or because I find they contain some insight, perspective or humor that appeals to me. This quote seemed apropos given the economic meltdown of 2008 and the vast destruction of wealth that accompanied it.
“The poor man’s son, whom heaven in its anger has visited with ambition, admires the condition of the rich. It appears in his fancy like the life of some superior rank of beings, and, in order to arrive at it, he devotes himself forever to the pursuit of wealth and greatness. Through the whole of his life, he pursues the idea of a certain artificial and elegant repose, which he may never arrive at, for which he sacrifices a real tranquility that is at all times in his power, and which, if in the extremity of old age, he should at last attain to it, he will find to be in no respect preferable to that humble security and contentment which he had abandoned for it.
Choice of attention — to pay attention to this and ignore that — is to the inner life what choice of action is to the outer. In both cases, a man is responsible for his choice and must accept the consequences, whatever they may be