Fall from Grace: End of Capitalism?

It is not everyday that you see people talk economics and finance. The global meltdown that originated from the Wall Street is finding grave echoes in Indian financial markets also. The authorities are busy resuscitating the banks so as to enable them to pump-prime the slumping economy. This dramatic fall out of the collapse of a few American investment banks raises many questions about the capitalist system. We saw a socialist system fall away about 20 years ago in the Soviet Union. Now we are witnessing one of the gravest financial crises of recent history in the US, the heartland of free markets and financial capitalism. The man on the street is confused. Both the economic systems are fallible and not without their own share of shortcomings.

The lessons are clear: Shun greed. Keep the markets well-regulated. Employ the smartest and sharpest guys as regulators. Don't write off governments and public ownership. It is the State which is bailing you out now. Punish those severely who play around with people’s money and undertake risky adventures and innovative financial engineering (experts call it ‘structured finance’). The USD 700 billion bail out plan appears to make capitalism a sham. Isn’t it a gargantuan waste of public resources? Far from being an efficient system, the casino capitalism has eaten away at GDP of several nations overnight.

And how about remembering Nehru for a few moments? Isn’t his mixed economy model for India a classic and prophetic answer to the crazy extremes of capitalism and socialism? Remember him, when you get over the anxieties about security of your stocks, ULIPs, SIPs and bank FDs.