Is capitalism fatally flawed?
No. But conservatives should embrace smart regulations, or risk fulfilling Marx's vision.
Recessions, like hurricanes, leave wreckage behind – bankrupt businesses, high unemployment, and sometimes even tattered philosophies.
The philosophy of economic conservatism has long been one of unquestioned deregulation. Conservatives have considered it as a way of unhooking government leashes that the economy strains against, setting it free to run at full speed and lead us to wealth.
But this philosophy seemed to collapse in the moral and financial wreckage of today's recession. Like many conservatives, I was left facing uncomfortable questions, chiefly: Is capitalism itself fatally flawed? I decided to consult a few past thinkers.
In "The Communist Manifesto" (1848), Karl Marx and Friedrich Engels propose that capitalism has inherent weaknesses. Marx said these would lead capitalist economies to collapse and become government-run socialist economies, and eventually utopian systems that he called communist. Today his words sound eerily current, like answers on a Sunday morning political show:
Interviewer: "Mr. Marx, not that long ago, lovers of capitalism pronounced your ideas dead. Now, according to at least one source, we are all socialists. What changed?"
Marx: "It is enough to mention the commercial crises that by their periodical return put on its trial, each time more threateningly, the existence of the entire bourgeois society."
Interviewer: "Nowadays we call these 'crises' recessions. You predicted that over time, capitalism would become dominated by larger and larger firms."
Marx: "[T]he concentration of capital and land in a few hands."
Interviewer: "And how does this concentration bring on socialism?"
Marx: "By paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented."
Interviewer: "So the bigger firms become, the harder they fall. In the US economy, some firms have become 'too big to fail,' and the government has moved in. As this plays out, what will happen to capitalism?"