Is the US rapidly becoming a failed state due to its free market policies?

[sasguru]

Sas, I hesitate to mention it, but a lot of us (clever or not) reading this thread are sniggering at _your_ stupidity

And what exactly do you find stupid?

[DodgyAgent]

It's been proven that mixed economies (like the UK) work best in terms of having a civilised society. Take the best of Keynsian economics form left of centre and monetary policies from the right. While Kensian policies have never dramatically failed, Monetarism on it's own has spectacularly failed, and where the market fails the government has a duty to step in. Unfetered capitalism relies on logical unemotive agendas, as a theory that's fine for robots or autistic computer programmers but in general human beings are inherently illogical and emotive, think fear and greed, this has to be factored in to any economic policy.

This is too logical for the "illogical and emotive" members of CUK

[Robinho]

Apart from the social costs, I have a deeper problem with unfettered free-markets: they don't seem to lead to industrial strength in a country, quite the opposite in fact. Manufacturing industry has been hollowed out in the UK and US to such an extent that these countries can't pay their way and rely on borrowed money.
Whereas all current manufacturing powerhouses: China, Germany, South Korea have active industrial policies.

That is because we have been living off of debt fueled consumer spending and speculation encouraged by the government and a messed up banking system. If we had to actually earn money instead of borrow it, we might actually start producing something to sell to the rest of the world.

The UK and the US didn't have much problem industrialising during the industrial age and they had a very free market by today's standards.

[Mich the Tester]

Is that Joe or Eugene?

Why not Jenny?

[sasguru]

that is because we have been living off of debt fueled consumer spending and speculation originally encouraged by the free market thatcherite government and a messed up banking system. If we had to actually earn money instead of borrow it, we might actually start producing something to sell to the rest of the world.
.

ftfy. Hth, bidi.

[sasguru]

The UK and the US didn't have much problem industrialising during the industrial age and they had a captive market , in the UK case and free labour in the US caseby today's standards.

There FTFY again.

[Robinho]

ftfy. Hth, bidi.

I agree to an extent, but creating a situation where loans are abnormally encouraged is not a free market principal.

[Robinho]

There FTFY again.

Slavery was detrimental to the US economy.

[doodab]

What cap'n Bob seems to overlook is that fractional reserve banking is exactly the sort of innovation that the free market produces and it's widespread adoption a brilliant example of competition at work. If full reserve banking resulted in a more efficient allocation of resources then it would be widely adopted.

[ZARDOZ]

I agree to an extent, but creating a situation where loans are abnormally encouraged is not a free market principal.

What's abnormal? Banks hold a very small percentage of what they borrow in cash. Free market economies have relied on such principles for decades. Add to that borrowing to low earners and cash hungry businesses feeds the economy as they have a higher propensity to spend. Restrict Banks to lending what they hold and the economy would contract massively.