This week at the World Economic Forum in Davos, Switzerland, Western-style capitalism has been put on the judgment block. According to the Economic Times, delegates “admitted that state capitalism on the Chinese model is in the ascendant” thanks to a financial crisis that continues to cause havoc in Europe and the United States. The sovereign debt crisis, wide income disparity and crippling unemployment have caused policy makers to rethink government’s role in regulating and directing the free-market system.
Back in 2008, during the darkest days of the Great Recession, Alan Greenspan, former chairman of the US Federal Reserve, framed this debate as a choice between socialism and capitalism, a battle many thought had been won with the fall of the USSR. To Greenspan, the economic crisis must not derail this central truth: The world’s economic driver is competition. It alone will lead to wealth and prosperity.
Alan Greenspan and the Debate Over Free Market Capitalism from Georgetown University on FORA.tv
Recently, in an op-ed in the Financial Times, Meddle with the Market at Your Peril, Greenspan wrote: “Whatever the imperfections of free-market capitalism, no regime that has been tried as a replacement, from Fabian socialism to Soviet-style communism, has succeeded in meeting the needs of its people.”