A New Front in the Battle of Ideas

A New Front in the Battle of Ideas

Answer 1

To a great extent, the American model of free market capitalism has been largely responsible for the economic crisis. Free market capitalism is based on the exaggerated belief that free markets provide the greatest fairness and prosperity possible and that any interference in the market process reduces welfare (Rabinowitz, 2010). Hence, it essentially advocates that free markets are capable of solving all the problems affecting society. The theory is flawed because it places too much emphasis on the virtues of free markets, advocating that perfect markets are the insurers of results that are beneficial to the larger society. However, this is seldom the case as imperfect markets produced negative results as was seen after the global economic crisis. The fundamental flaw with free market capitalism is that it maximizes individual freedom while upholding the central belief that all markets are naturally inclined to seek a natural balance due to a strong link between the 'invisible hand' and the interests of society (Rabinowitz, 2010). The system practically gives market drivers and traders of commodities a carte blanche so that they can pursue their own economic interests while caring little about the public.

Answer 2

I consider myself to be a Keynesian. This is because it identifies the flaws prevalent in the free market capitalism model and proposes greater intervention of the state in the economy so as to ensure a minimum standard of living for the public. The Keynesian school of thought is established on the principle that the economic cycle should not be self-regulated and that it should rather empower the state to provide a range of social benefits to the general population so as to ensure a minimum standard of living (Rabinowitz, 2010). State interventions may include ...