Tuesday, October 07, 2008

World Economic Growth Will Resume and Recover

Is this a final "Crisis of Global Capitalism" -- to borrow the title of a book by George Soros written shortly after the Asian financial crisis of 1997-98? The crisis that kills capitalism has been said to happen during every major recession and financial crisis ever since Karl Marx prophesized the collapse of capitalism in the middle of the 19th century. Although I admit to having greatly underestimated the severity of the current crisis, I am confident that sizable world economic growth will resume before very long under a mainly capitalist world economy.

Consider, for example, that in the decade after various predictions of the collapse of global capitalism following the Asian crisis, both world GDP and world trade experienced unprecedented growth thanks to the power of market competition on a global scale. The South Korean economy, for example, was pummeled during that crisis, but has had significant economic growth since. World economic growth will recover once we are over the present severe financial difficulties.

~Gary Becker in today's WSJ editorial "We're Not Headed for a Depression: No, this isn't the crisis that kills global capitalism."

5 Comments:

At 10/07/2008 7:57 AM, Blogger Marcus said...

I guess it kind of depends on how invasive the government intervention is, doesn't it?

Government intervention creates a lot of uncertainty.

 
At 10/07/2008 1:39 PM, Anonymous Anonymous said...

Headline reads: No recession call likely soon, NBER member says

Inside the artical: Hall said he personally thought the U.S. economy was probably in a recession, but quickly added: "That's not official. I'm saying it very quietly."

Why: "We have been subjected to political pressure, which I'm not going to talk about," he said at an economics conference in Washington. "This has been an issue but we've stood tall on that." He did not elaborate.

http://www.reuters.com/article/ousiv/idUSTRE4967N520081007

Uh-Huh their lying.

 
At 10/07/2008 1:53 PM, Anonymous BARKLEY said...

The markets did not really cave in until Paulson and friends said that without the bailout everything would collapse.
Then the bailout was delayed and everything began to collapse.
I say markets are mainly psychology and most of this bad situation has been just that.
Economics is psychology. Buying and selling are human activities.
Statistics will not capture this any more than science has been able to explain consciousness.

 
At 10/07/2008 4:41 PM, Anonymous Anonymous said...

This is the age of Obama.
This is the ObamaNation.
Obama is the Alpha and the Omega.

http://www.youtube.com/watch?v=l3GjPNzHmJw

 
At 10/07/2008 9:03 PM, Anonymous qt said...

anon. 1:39,

"Uh-Huh their lying"

Should be "They're lying"

Contraction of "they" and "are" not the possessive (ie. mine, theirs)

Good piece by Becker.

 

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