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End of the Free-Market Dream?

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Martin Wolf wrote in his column this week that “the dream of global free-market capitalism” has gone the way of the dodo bird. It seems that many of the highly regarded talking heads are all worried about the true implications of the Fed’s Bear Sterns bail-out. Wolf takes it furthest of all, offering a eulogy of sorts for free-markets and deregulation.

If the US itself has passed the high water mark of financial deregulation, this will have wide global implications. Until recently, it was possible to tell the Chinese, the Indians or those who suffered significant financial crises in the past two decades that there existed a financial system both free and robust. That is the case no longer. It will be hard, indeed, to persuade such countries that the market failures revealed in the US and other high-income countries are not a dire warning. If the US, with its vast experience and resources, was unable to avoid these traps, why, they will ask, should we expect to do better?

These are difficult words for a booster of free-markets. More on this later…

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Written by walonline

March 28, 2008 at 1:06 pm

Posted in Markets, Regulation

Tagged with ,

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