"the rich people make everyone richer"

A Brief History of American Prosperity

Via-CITY

An entrepreneurial culture and the rule of law have nourished the nation’s economic dynamism.

GUY SORMAN



Worry over America’s recent economic stagnation, however justified, shouldn’t obscure the fact that the American economy remains Number One in the world. The United States holds 4.5 percent of the world’s population but produces a staggering 22 percent of the world’s output—a fraction that has remained fairly stable for two decades, despite growing competition from emerging countries. Not only is the American economy the biggest in absolute terms, with a GDP twice the size of China’s; it’s also near the top in per-capita income, currently a bit over $48,000 per year. Only a few small countries blessed with abundant natural resources or a concentration of financial services, such as Norway and Luxembourg, can claim higher averages.

America’s predominance isn’t new; indeed, it has existed since the early nineteenth century. But where did it come from? And is it in danger of disappearing?

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Free Markets for Everyone

The other day on Twitter I saw a comment which unfortunately I did not bookmark and so I do not remember who to attribute it to. It was in the context of a discussion and the comment was in response to something someone else had said and again I can not recall either party, though I do believe it was between to conservative columnist. But the comment was so perceptive that it has stuck with me, it was this:

If liberals really understood markets they could not remain liberals

Mostly people think of markets in the economic aspect, which is its predominate useage in society. However the market has a much wider context as well, best defined in the first sentence of its Wikipedia's definition:

A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange.

Markets, in essence, are about exchanges between individuals or other institutions or entities comprising people. This is we come to have such expressions as the "the marketplace of ideas." Also from Wikipedia

The "marketplace of ideas" belief holds that the truth or the best policy arises out of the competition of widely various ideas in free, transparent public discourse, an important part of liberal democracy.

The idea of free markets whether it be in ideas or commerce is that ultimately "the best wins out". Some, particularly on the left, would have you believe that free markets which is the essence of capitalism is nothing more than "survival of the fittest" and that the ultimate outcome is that the weak are "put upon" by the strong. This is not only a perverted view, it is not even close to how markets work because for markets to work they depend on individuals making choices not choices being made for individuals. Once choices are made for individuals then it ceases to be a "free" market and the only entity with the power to "game" markets is the government. Governments are the only player in commerce than can compel individuals or corporations to operate outside of true free market principles. This is why subsidies and mandates are so egregious, they distort the marketplace.

Here is a more accurate description of how free markets work.  People left with only their own self interest as a compass will inevitably choose the product, service or idea which is most beneficial to their circumstances. The cumulative decisions of individual choices will ultimately determine the degree of success or failure of any product, service or idea. So in the end it is not the survival of the fittest than wins, but the success of the best that survives.

A free market allows individual choices to determine what becomes popular and successful. It is not perfect but what is? I might love a particular brand of cereal but for whatever reason it does not catch on with the rest of the the cereal eating public, so it is discontinued. It may have nothing to do with the cereal itself, perhaps the manufacturer did not have sufficient resources to "market" the product so it never received the notice I think it deserved, that's Life, which by the way is one of my favorite cereals.

People may not like free markets in commerce or in ideas, but what is the alternative? And more importantly why wouldn't they? There is really only one alternative to free markets, that is allowing someone else to determine for us what is best for us. And there is really only one reason for someone to oppose the free market concept, they believe they know what is best for the rest of us.

Can you think of any other reason or any other motive in not allowing free people exercising their own choices to determine what is best?  Only the extremely arrogant or the weakest among us would want to create a system where a select few would determine what is best for the rest of society. Do we wish the narcissistic colluding with those of limited ability or motivation to be the guiding forces in societal evolution?

When free markets are allowed to work they create amazing benefits to the greatest number of people simply because the greatest number of people are allowed to determine what is best. Despite a leftist narrative that sees capitalism as a system of exploitation for the most part the opposite is true, it has worked to the benefit of the greatest number of people. True visionaries have always recognized that what is best for the most, is also what is best for themselves. This is in line with the simple truth that if you put the individuals rights above all else you protect the rights of everyone including yourself.

Here are a couple examples to understanding the importance of how free markets actually work rather than how the left would have you believe they work.

One of the most innovative examples of ingenuity (American or otherwise) that I have ever heard of has to do whith one of the most ingenious men that ever lived, Henry Ford. This particular example of Ford's ingenuity has to do with the early manufacture of the Model T. which revolutionized transportation. It is reported that Ford specified that shipping crates of certain suppliers use wood cut to a certain thickness. He did this so that the packing crate material could be reused in certain components of the Model T.

This story may or may not be true but what is true is that Henry Ford used every trick he could think of to drive down the cost of manufacturing his cars. The reason for this was not so that he could "pocket" the savings as some people might have you believe of "evil capitalist" but on the contrary his purpose in saving money in the manufacturing process was so that he could sell his product cheaper to the public. Henry Ford famously said "I will build a motor car for the great multitude." This business model,now popularly employed across many industries, Of driving down prices to increase market, was not all that popular at the time particularly in the automobile industry where owning an auto was considered a status symbol. Another example of this cost cutting mania was the reason Ford changed the paint color on Model T's to black only, they originally came in other colors, he did this because black paint dried faster and this sped up production time, thus saving costs which were passed on the the consumer. In 1913 the base price of a Model T was $850 by 1925 the price was $300!

Henry Ford was not alone nor the first in understanding that the key to success was to provide products efficiently which resulted in lower prices for everyone. Consider that "Robber Barron", John D Rockefeller who not only made the second stage of the industrial revolution possible, he saved the whales.

In 1865, when Rockefeller’s market share was still minuscule, a gallon of kerosene cost 58 cents. In 1870, Standard’s market share was 4%, and a gallon cost 26 cents. By 1880, when Standard’s market share had skyrocketed to 90%, a gallon cost only 9 cents — and a decade later, with Standard’s market share still at 90%, the price was 7 cents. These data point to the real cause of Standard Oil’s success — its ability to charge the lowest prices by producing kerosene with unparalleled efficiency.

John D. Rockefeller had a rare business mind. He was at once a visionary, foreseeing a world in which his kerosene illuminated millions of homes, and an accountant obsessed with day-to-day penny-pinching. Upon buying his first refinery in 1863 at the age of 23, Rockefeller started optimizing every part of his business, from his storage facilities to his refining methods to the number of non-kerosene-refined products (waxes, lubricants, etc.) that could be squeezed from every barrel.

In pursuit of efficiency, Rockefeller employed then-rare business strategies such as vertical integration and economies of scale. For example, by purchasing his own forest and producing his own barrels, Rockefeller lowered per-barrel costs from $3 to $1 while increasing reliability and quality. To transport oil, Rockefeller obtained large rebates from railroads, not through corrupt conspiracies (the typical explanation) but by dramatically lowering the railroads’ costs. Where others offered railroads unreliable, highly variable traffic, Rockefeller offered guaranteed daily fleets of Standard-owned tank cars, loaded and unloaded by Standard-provided facilities, for straight-line trips from Cleveland to New York. The Lake Shore Railroad’s James Devereux testified that Standard Oil lowered transport costs from $900,000 to $300,000 a trip.

Despite leftist lore, these are but two examples of how free markets actually work for the befit of all. Yes Ford and Rockefeller became rich beyond most of our wildest dreams, but their contribution to society on so many levels is incalculable. They helped create the source of America's strength the "middle class". They along with countless other "capitalist" expanded the economy creating an every growing economic pie for American's and the rest of mankind to eat from.

This is the great misunderstanding, With free market capitalism there is no reason to "redistribute" wealth to create equity, growing wealth is the natural bi product from which everyone ultimately benefits. A rising tide does indeed raise all boats and a growing economy naturally increases everyone's well being.

Again what is the alternative? Put limits on success? Promote the unworthy at the expense of the industrious? Then who will seek to be industrious? Like most arguments from the left, the idea that you can tweak imperfection to make it perfect by compulsion is not only wrongheaded it is by it's very nature a restriction on growth. You can not put chains on men and call them free any more than you can  design societal structures to equalize outcomes and expect growth either economic or in ingenuity and inventiveness.

 The free market is a  dynamic system of wealth creation and is the single greatest source for the elimination of poverty in the history of mankind yet to listen to some on the left they would classify it as evil. The shallowness of their understanding is only matched by the arrogance of their belief that they somehow promote benevolence when in fact their ideology is and has always been the source of tyranny and the enslavement of mankind both in  body and spirit.

If this is not true, if I have somehow misrepresented the obvious, then meet me in the marketplace of ideas and show me your wares. Explain to me the better system, not with theories but with proof, with actual examples of how any system yet tried is superior to the well being and the greater good of mankind than free market capitalism.

The Choices-a comparison

The value of free enterprise has nothing to do with money or wealth

Arthur C. Brooks

There’s no doubt it’s been a rough few years for free enterprise in the United States. The financial crisis that began in 2007 is still a drag on the economy, and for every sign of recovery there’s another dark cloud on the horizon. Entrepreneurs are unsure about the future and skittish about investing their time, treasure, and talent in growing their businesses, much less starting new ones. President Obama’s stimulus package was a dud, and the unemployment rate today is 50 percent higher than what he promised would be the worst-case scenario.

It’s easy to get discouraged. But we cannot afford to be defeatist—or be defeated. Principled advocates of free enterprise have to redouble our efforts to make the case for free enterprise and confront its detractors with the truth. This means we have to explain in clear and unambiguous terms why free enterprise matters to the United States.

It might seem that the best case for free enterprise is the material one. Free enterprise lets people make more money, buy more and nicer stuff, and have a greater degree of comfort. The freer our economy is, the more competitive the US economy is vis-à-vis the rest of the world. And so on.

But these aren’t our best arguments. There is another reason, a transcendent reason, for which free enterprise matters most—and this is the case we all must be able to make today.

We all learned early on in school that the Declaration of Independence claimed for each of us the unalienable right to “life, liberty, and the pursuit of happiness.” Note that the founders didn’t assert a right to be happy; such is the domain of tinpots and crackpots, of 1984’s “Ministry of Plenty” and Josef Stalin’s aggrandizing self-description as the Soviet Union’s “Constructor of Happiness.” So what, in practice, does this right to pursue happiness mean?

It means the right to define and earn our happiness through our ideas, hard work, and gumption, to earn our success by creating value honestly, in our own lives and in the lives of others. It doesn’t mean the pursuit of a big lottery win or an inheritance. Those bring money, but not happiness. And a mountain of evidence shows that after a fairly low threshold, more money doesn’t make us happier. The best case for free enterprise has nothing at all to do with money or material goods or wealth. Those are just icing on the cake. We must stop talking about free enterprise as just an engine of wealth creation. It’s much more than that.

In short, the secret to the pursuit of happiness is earning our own success; creating value with our lives and in the lives of others. This earned success is the fruit of hard work and just rewards in a system built on merit. Only in a free enterprise system is effort and innovation rewarded over connections and predation. (And this means that we have to draw a distinction between free enterprise, which is based on opportunity and competition between ideas, and corporate cronyism, which is just another form of statism masquerading as free enterprise.)

Of course, none of this is new to free enterprise advocates. Most of us have known our whole adult lives that an enterprise society provides the greatest freedom and opportunity for people, not just in material ways, but by allowing us to give our lives meaning and purpose. Yet we’ve shelved transcendent arguments and devoted far too much time and effort to making arguments about efficiency—arguments our opponents largely accepted (or at least stopped trying to refute) over a decade ago.

Instead, we have allowed the enemies of free enterprise—the statists, the redistributionists, the folks for whom every problem is a government program waiting to be enacted—to claim the mantle of fairness and the moral high ground for their discredited ideas. That needs to change. After all, Adam Smith wrote his Theory of Moral Sentiments two decades before The Wealth of Nations. Efficiency came after morality, not vice versa.

It is time to contest the moral high ground. In order to win the fight for free enterprise against its opponents who are once again beating the drum to turn America into some sort of Anglophone Sweden (or Greece), we have to follow Smith’s lead. We have to make the case for free enterprise and economic growth from a moral perspective, using language about opportunity and happiness and living a meaningful life. We have to explain how the pursuit of happiness requires the opportunity to earn our success, and how earned success comes only when we succeed on our own terms.
The statists preach a crass, shallow gospel of materialism. We cannot defeat them by merely responding with claims about economic efficiency. We can win the battle for free enterprise in the United States. But we have to say what is written on our hearts, not just on our bank statements.



How's That Government Meddling Workin' Out for Ya'?

By Richard N. Weltz

Back in the heyday of the old Soviet Union an agricultural commissar from the Ukraine was summoned to the Agricultural Ministry in Moscow to report on the year's potato crop. "Ah, Comrade Minister," said the commissar, beaming, "If all the potatoes harvested this year were put into a single pile, it would reach to the feet of God."

"What!" exclaimed the minister, "you know that in Communism there is no God."

"Also," sighed the commissar, "in the Ukraine is no potatoes."

There was more truth than fiction to this old saw; and we remember the "good old days" of the USSR with complete government rule over production, 5-year plan after 5-year plan, and nothing but empty shelves, long lines just to buy bread, and tinny little cars for the few who could buy even that.

And we congratulated ourselves that in the good old U S of A, we were smart enough to allow market forces to bring abundance and luxury into every grocery, department store, or auto showroom. Shortages, certainly, were little known with respect to anything Americans needed or wanted. That may not be so true a whole lot longer, if Obama and his leftist-thinking ideologues continue to have their way.

Consider the following:

Drugs needed to treat for ADHD (attention-deficit hyperactivity disorder) are in seriously short supply, as reported by the New York Times. It seems that the DEA worries that too much production might lead to theft, so it sets quotas on how much of the relevant drugs the pharmaceutical industry may produce each year. In its bureaucratic wisdom, this has caused severe shortages of the drugs for people, especially children, who badly need them.

There's no shortage, however, of alternative-fueled cars; there's a glut thanks to government meddling. The recent automobile show in Detroit displayed a panoply of plug-in and hybrid vehicles that few, if any, buyers want. Reported Nick Bunkley:

Automakers are flooding the Detroit auto show with new hybrid and plug-in models, but the combination of gas prices below $4 a gallon and higher upfront costs for the cars is not attracting consumers.

Regardless, the automakers have little choice but to develop and try to push more hybrids as they prepare for fuel-efficiency requirements that call for significant increases later this decade.

But there is a huge shortage of a mandated fuel additive. The feds may be levying up to $6.8 million in fines on oil companies who fail to blend into their gasoline and diesel fuels cellulosic biofuel, which is not available commercially, but which government planners demand refiners to blend in.

On the other hand, the DoT's "Cash for Clunkers" program did create a shortage of affordable used cars because the rules set up by the planners mandated that, while the cars turned in had to be in drivable condition, they could not be resold on the secondhand market, but had to be completely scrapped. Unintended consequences of government meddling struck again.

Incandescent light bulbs aren't in such short supply yet - but they soon will be. In its infinite wisdom, Congress decided to set standards for light bulbs that could not be met by the kinds based on the original Edison design and still widely in use throughout the nation. Beginning January 2012, the 100-watt size was to be effectively banned, to be followed in subsequent years by bulbs of other wattages.

Yes, a last-minute bit of legislation withholds funding for enforcement of the ban; but it's too late to do any good. Manufacturers have already shut down production and moved jobs offshore to Asia, where the expensive substitute CFLs are made. Says ABC News:

But what many Republicans are celebrating as a win for individuals' light-bulb-choosing freedom will probably not save the energy-guzzling bulbs from disappearing off store shelves.

"The industry has moved on," said Larry Lauck, a spokesman for the American Lighting Association.

Lauck said U.S. light bulb manufacturers have already "retooled" their production lines to build more efficient bulbs, he said.

Sometimes bureaucratic interference doesn't create an actual shortage of something but simply drives its price sky high over what once were free-market levels. Take the recent case of colchicine, as explained by Slate.com:

A drug called colchicine is all that keeps some 2 million American gout patients from suffering debilitating pain in their toes, elbows, wrists, and fingers. Doctors have prescribed the compound, derived from the seeds of the autumn crocus, for centuries.

But patients who take colchicine woke up with a new symptom recently: a giant pain in the wallet. Until January, colchicine was sold by many companies and cost as little as 10 cents a pill. Now it's available only under the trade name Colcrys, sold by a Philadelphia company called URL Pharma -- for five dollars per pill.

It seems that, although the drug was originally approved in 1974 and had no history of problems, somebody (you get three guesses who) with access to political ears persuaded the FDA to revoke all licenses for its manufacture and require producers to go anew through an approval and licensing procedure. At the normal market price of a dime a pill, it's small wonder that only one company bothered to do so and now can charge any price it pleases.

These are, of course, only a few examples of the egregious way in which the government began in January 2009 to control ever more of the American economy - banking, finance, autos, energy production, and whatever else some élitist types believed they know better how to do than Americans can do for themselves in a free market economy.

The Obama DOJ even tried to take away a church or synagogue's right to hire and fire its own spiritual leaders and religious teachers -- stopped only by the unanimous Supreme Court decision earlier this week "exempting" religious organizations from the burden of the pervasive employment rules that govern secular enterprises.

Speaking of employment, though, PepsiCo's largest bottling unit is being forced by the EEOC to pay a whopping $3 million-plus fine and offer jobs and training to blacks, against whom the government says Pepsi discriminated by choosing not to hire applicants who didn't pass the company's criminal background check.

Shortages, pricing screw-ups, unintended adverse consequences, micromanagement of citizens' private lives - the Soviets did all that; the Chinese as well; and the North Koreans and Cubans are still at it, all to ill effect. Never before in our nation's history have we moved so quickly and so unthinkingly down this dangerous path. Look around, and keep this in mind when you cast your votes in 2012.

Conservatives should stop apologizing for capitalism

Via-Washington Examiner

TAGS: David Limbaugh

Everywherewe turn these days, it seems, leftists are undermining and attacking capitalism on moral grounds. Their criticisms are directed not at merely certain corrupt corporations or individuals who abuse the system, but at the system itself. Sadly, few conservatives, even conservative Christians, are willing or prepared to defend capitalism's virtues. Rather than tout it in terms of liberty, they sheepishly apologize for its allegedly inherent greed.
It's a testament to the power of propaganda and the appeal of emotion over reason that a system that has produced the greatest prosperity in world history is castigated on moral grounds, while those systems that have proliferated abject misery, poverty, tyranny and subjugation are hailed as morally superior.

Granted, most leftists don't openly confess their hostility to capitalism, but they come close, especially in their endless waging of class warfare.

Surely you've heard President Obama say, preposterously, "A free market was never meant to be a free license to take whatever you can get, however you can get it." No one actually supports this straw man argument. American capitalism has always been subject to the rule of law. Even the fiercest free market proponents don't defend the license to steal or economic anarchy.

Hidden in Obama's statement (and more apparent in some of his other statements) are unmistakable implications that those who thrive in our system are immoral and don't deserve it and that the less successful have been cheated out of their just desserts. This doubtlessly proceeds from his leftist view of the relationship between government and the people.

The left doesn't seem to comprehend the indispensability of private property to liberty or the necessity of liberty to achieve prosperity. To them, it is not individuals operating in a climate of liberty who produce prosperity. Government produces (or magnanimously permits) the creation of wealth and is the most appropriate vehicle for distributing that wealth and delivering the greatest good to the greatest number of people.

Leftists pay lip service to America's founding ideal of equality of opportunity but honor instead the un-American idea of equality of outcomes. They fully intend to use the power of government to rectify America's inequitable distribution of resources. Don't forget that at one time, at the hands of the left, the top income tax rate was higher than 90 percent or that it was 70 percent before the Reagan cuts.

Indeed, it's ironic that leftists depict conservatives as hyperbolic and extreme for sometimes using the terms "socialist" and "Marxist" to describe Obama.

Never mind Obama's actual background, his associations, his statements, his radical appointments and his unprecedented policies. Those who describe him in terms that accurately capture his extremism and divisiveness are the ones written off as extremists or divisive.

This irony is compounded by the fact that it is leftists who are guilty of hyperbole -- even paranoia -- in their attack on conservatives, their patriotism and their free market advocacy. Consider the bizarre rant of Obama's spiritual adviser, Jim Wallis, in trashing America's "conservative media" to a group of Britons.

Wallis said: "We now are controlled by the right-wing media, Fox News and all the rest, and this is the media that has an ideological point of view that America is best and the rest of you don't even count, that the rich are our salvation. ... When I say the 1 percent of the country has more wealth than the bottom 90 percent, they say that's a good thing. ... You just keep feeding the rich and the poor with their little tin cups hoping the rich are good tippers; that's a good thing for the economy."

Talk about the stuff of fiction. Conservatives don't believe foreign countries "don't count." Nor do they believe that the rich are anyone's salvation or that they are glorified benefactors of the economically less fortunate.

It is yet another irony that liberals accuse Christian conservatives of subordinating their theology to their politics, when it is their "social justice" brethren who are guiltier of conflating their politics with their ideology, idolizing redistributionism and, in my humble opinion, distorting the Gospel to conform to their political predispositions.

G20: If capitalism is 'overthrown', we'll lose our political freedom

Via-UK Telegraph
International regulation to manage the economic crisis could have dangerous results, says Janet Daley.

Some of the demonstrators in this week's G20 protest jamboree are demanding the "overthrow" of capitalism. Well, there are lots of things than can be done to "capitalism" – it can be undermined, suppressed, sabotaged, even outlawed – but it cannot be "overthrown" because in itself, it has no power.

It is the very opposite, in fact, of a tyranny. It is simply the conglomeration of all the transactions made between individual and corporate players in an open market. Some people may gain power through those transactions but that power is transient and contingent on their own financial success: they are not installed in immutable positions from which they can be forcibly removed in a coup d'etat.

The question we are wrestling with now – and which the G20 will certainly fail to resolve – is how much the bodies which actually do have power should undermine, suppress, sabotage or even outlaw the practice of capitalist exchange.

Those who talk of "overthrowing" capitalism are determined to depict it as a system of government in a precise parallel with socialism, when in reality, capitalism is not a system in the ideological sense.

It is, if anything, an anti-system: the aggregation of human behaviour as it goes about fulfilling particular wants and needs. It can be described in anthropomorphic terms, such as "ruthless" or "benign" but of itself has no motives and no objectives. (Gordon Brown is more than usually fatuous when he insists that markets need to have "values": only people have values, methods of exchange do not.)

It is in the interests of the Left to talk as if capitalism and socialism were precisely analogous because then they can be seen as competitors and in bad times, the command economy as opposed to the market-based one can win the popularity contest. But this fallacious argument into which, I am sorry to say, a great many well-intentioned people are allowing themselves to be drawn is very dangerous: capitalism isn't really an "ism" which is why the term "free market economics" is so much more apt.

When we make the case for capitalism, we are defending the political principle of freedom, not arguing for one kind of rigid economic organisation over another. The debate is being hopelessly muddied by those late converts to free enterprise – politicians like Mr Brown who believe that markets should only survive if they can be made to serve Left-wing purposes.

So the idea that the arguments which will dominate the summit are purely economic is quite wrong: this is about politics. The fundamental disagreement between the United States and Europe amounts to nothing less than the question of whether the great 200 year old experiment in national democracy – government of the people, by the people, and for the people – will survive.

The major dispute over the American preference for fiscal stimulus as opposed to the European priority of global regulation is at the heart of this. Europe may as well get this straight now: Barack Obama will not subject the United States to policing by an international regulatory authority, not just because he puts the economic recovery of his own nation above all other concerns (and from the point of view of the rest of the world, this is no bad thing since American recovery is essential to the future of the global economy) but because to do so would be to sign away the democratic accountability of his and all future US governments to a body in which American voters had no say.

Unlike in Europe – where the historical commitment to democracy has been patchy – America has little difficulty with the question, "who needs to be in charge of our future?" The answer is always, "we the people". Democratic self-governance, and the concept of personal freedom that underpins it, comes first and last.

Which is why the anger in America about bankers (and the recent furore about AIG bonuses) was more personal than political: the rage was against individuals who had abused the freedom of the market and who needed to be punished as individuals.

When the crisis first hit, the overwhelming majority of Americans were vehemently opposed to any bank bail-out. That was why Hank Paulsen's first rescue package was thrown out by Congress: the bankers had screwed up and they were not (hell, no) going to be pulled out of the tank by taxpayer dollars.

The US population had to be painstakingly persuaded that if Wall Street went down, Main Street would go with it before they agreed to stump up: they were much more inclined to believe that the banks should be allowed to go under than that the hard-earned money of ordinary people should be given to support them. You take the consequences of your own stupidity: that's the price of freedom. Faced with the damage that such bank failures would have done to the mass of the population, Americans relented, but I suspect that many still believe they could have rebuilt their lives and economy again from scratch through their own industry and resilience.

The good news is that even in Britain, for all our overheated arguments about the future of capitalism, there seems little appetite for a command economy to replace it. Because people are as disgusted by politicians who have spent their money unwisely as by bankers who have lent it unwisely, they distrust the state as much as they dislike the banks. But they are not at all sure how this notion of international regulation will affect them.

Everybody is telling them that global cooperation (which sounds so nice) is necessary for survival, but nobody is saying what that will actually mean in terms of sacrificing the power they have over their own government – even in the attenuated form in which it still exists in the EU. When people are worried about their survival, it is quite easy to persuade them to suspend what seems like the abstract concept of democracy. But once you have given up, as citizens, that power of restraint over your elected government, you can say goodbye to it forever.

By all means, we must continue to make the moral case for capitalism, but it seems that we have to make the case for democracy, too. People must not be bullied into believing that economic security must be bought at the price of their political birthright. The operative word in the phrase "free market economics" is "free".




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