The ‘Failure of Capitalism’ is never the failure of capitalism

It is always the failure of government.

Capitalism is not a means of government.  It does not make law.  It is a means of creating and sustaining economic activity.  Creating wealth if you will.

Capitalism requires the creation of a legal environment that is conducive to that economic activity.  Some of those aspects are establishing security from hostile acts both foreign and domestic, protection of private property, including wealth; maintenance of contract law so that binding agreements can be trusted; and the maintenance of the societal infrastructure which includes a sound currency, universal basic education, and effective transportation.  The failure of capitalism can almost always be traced to the failure of the government to maintain this environment.

So when someone announces that the current economic downturn is the ‘Failure of Capitalism’ what they are really saying is that the government failed.  Anything the government does to supposedly ‘fix the problem’ that does not work to restore an environment conducive to capitalism and enterprise will ultimately fail.


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