Chapter 11
Still, Western Capitalism Is Alive, But. . . .
In the wake of the crisis, the end of capitalism became a popular theme with Western politicians, economists, journalists, and the general public. As the governments were bailing out and nationalizing leading banks, insurance companies, and even some manufacturing firms, there was a lot of argument about the growing economic role of the state and the need to strengthen it in the longer term.
Calm Down: No End of Capitalism
However, this anticapitalist rhetoric had no sound conceptual basis and began to fade as soon as Western economies started recovering.
There is no medium- or long-term trend toward increasing state involvement in economic activities. The main pillars of the Western capitalist system: private companies as dominant players, market-based resource allocation, profit maximization as the major goal of company management, and market prices freely set by producers depending on supply and demand, remain intact.
Government Bailouts and Nationalizations Were a Temporary Step
Government bailouts and nationalizations were a temporary step, an emergency rescue operation. As targeted financial institutions and companies are restructured and put back on track, they are again sold out to private investors, and the state is even making profit on it. Government loans are also repaid.
Much of the $700 billion fund, established by the U.S. government to help ailing banks, AIG, GM, and Chrysler, was not actually disbursed. ...
