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dunadan
Nov 17 2003
11:24 am

Capitalist theory (so long as it is constrained to economics) posits as little government intervention as possible in the fluctuations of the market. It does not “disturb other spheres of human life” except insofar as those spheres are affected by economic conditions.

Adam Smith did not argue for the “total freedom of market forces” to the exclusion of justice. He still believed in laws against theft and vandalism (which are economic issues — yet not subject to "market forces).

You seem to have a rather rosy picture of Keynes. Good ol’ J.M. did not simply advocate government regulation. He advocated wholesale intrusion of the governmental sphere into the economic sphere. During economic downturns, the Keynesian government becomes the national employer, spending money on large public works projects to ensure full employment. Of course, the result of this is massive deficits, resulting in wasteful debt servicing. You wouldn’t do it on your credit card — why do it in government? Talk about “disturbing the functions of the other spheres of human life.”

Of course capitalism must be prevented from encroaching on the realms of education, government, religion, etc. And sometimes government must legislate against monopolies that would upset normal market forces. But that doesn’t disqualify capitalism as a legitimate theory of economics.