|
November 26, 2008
In this review of John Braithwaite's Regulatory Capitalism: How it Works, Ideas for Making it Work Better at the Australian Review of Public Affairs Jenny Stewart says that:
when everything is booming, how we love it! Easy credit fuels massive consumption. We buy bigger houses and more and more stuff to put in them. Clive Hamilton keeps telling us we should stop, but we take no notice .... But then, like recovering junkies, we have to weather the bad times, when the credit dries up, and businesses stop investing, and the grim spectre of recession. So, what should be done? There is general agreement that once the dust has settled, markets that have been more or less unregulated will have to be reined in. But this is easier said than done. Whatever governments do, they create opportunities for some of the cleverest boys and girls in the world to outwit them. Like generals, governments always seem to fighting the last war or, sometimes, the wrong war. There is moral hazard at every turn, because the knowledge that they will be saved leads the entrepreneurs of risk into even more daredevil schemes.
Stewart says that Braithwaite argues that there is a kind of symbiosis between the capitalist system and the states that attempt to regulate it. While capitalist expansion creates new challenges, so does the regulatory apparatus grow in power and flexibility to meet those challenges. ‘De-regulation’, accordingly is a myth.
Stewart argues that we need a theory that would give some guidance for establishing a new order that combines improved national-level regulation, with some kind of new (or re-newed) form of international regulation. Such a theory of regulation would reconcile the political and the economic.
|
