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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhat would a true conservative economist recommend? Nationalize the banks!
This notion seems counterintuitive: after all, the schools founders provided the intellectual framework for the laissez-faire turn against market regulation over the last half-century. But for them, bigness and competition could easily become mutually exclusive. One of the most important Chicago School leaders, Henry C. Simons, judged in 1934 that the corporation is simply running away with our economic (and political) system.
Simons (a hero of the libertarian idol Milton Friedman) was skeptical of enormity. Few of our gigantic corporations, he wrote, can be defended on the ground that their present size is necessary to reasonably full exploitation of production economies.
The central problem, then as now, was that very large corporations could easily undermine regulatory and antitrust strategies. The Nobel laureate George J. Stigler demonstrated how regulation was commonly designed and operated primarily for the benefit of the industries involved. And numerous conservatives, including Simons, concluded that large corporate players could thwart antitrust break-them-up efforts a view Friedman came to share.
Simons did not shrink from the obvious conclusion: Every industry should be either effectively competitive or socialized. If other remedies were unworkable, The state should face the necessity of actually taking over, owning, and managing directly all industries in which it is impossible to maintain effectively competitive conditions.
Full article: http://www.nytimes.com/2012/07/23/opinion/banks-that-are-too-big-to-regulate-should-be-nationalized.html
elleng
(130,908 posts)el_bryanto
(11,804 posts)Essentially he's arguing against monopolies unless they are owned by the people and managed by their representatives.
Bryant
snappyturtle
(14,656 posts)salvorhardin
(9,995 posts)We're living a country that, domestically, is almost a polar opposite to what it was.
snappyturtle
(14,656 posts)Reagan of how is was they look at me as if I have three heads!
Selatius
(20,441 posts)Unfortunately, they do. This is why you'll still see thugs like Summers or Geithner and others of their kind going through the revolving door between big business and government.
salvorhardin
(9,995 posts)Everything has been financialized -- and that's something neither Keynes, nor Simmons, nor Marx saw coming. Hell, I'm not even sure Friedman saw it, although he perhaps can be considered the father of the casino economy (which I guess would make Greenspan its prophet).
OmahaBlueDog
(10,000 posts)When he took the Presidency in 2009, he had an historic moment of opportunity to nationalize the too-big-to-fail institutions (Citi, BoA, Chase). Busting them up into smaller pieces, and re-regulating limits on how many states in which a bank could operate would have gone a long way toward preventing a repeat of 2008.
salvorhardin
(9,995 posts)lumberjack_jeff
(33,224 posts)salvorhardin
(9,995 posts)TheKentuckian
(25,026 posts)If you cannot independently provide oversight and depend on the industry or corporation to self report then there is also a problem.
How are you going to issue drilling permits with no ability to inspect or shut down the wells? The only thing we can do is hope for the best and levy fines far too small to act as a deterrent or fix the resulting problems.