As was shown in 2008, free markets work quite well until they don’t. At that point governments step in and take whatever measures are necessary to stop a complete collapse. Who even in 2007 thought that governments would print over $20 trillion dollars to stop what would have easily been a 1930’s-style crash? Those that expect a rapid collapse of civilization both underestimate governments readiness to act to forestall any social upheaval that threatens the rich and powerful, and the extent that wasteful economic activity can be rapidly stopped when required. Prior to World War 2, my grandfather ran a successful newspaper shop, with much of his profits coming from selling sweets (candies to those in North America). Along came WW2 rationing, sweets were deemed not to be critical, and he had to close up his shop. He was not allowed to sue for his lost “future profits”, he just had to deal with it. Continue reading
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