Commentary on Political Economy

Saturday 6 August 2011

Markets and Governments

The difficulty with the reasoning that we exposed below is that when "markets" say that they are "punishing governments" for not taking the "correct measures", they are neglecting that in point of fact governments are always doing what "markets" demand! And if it then turns out that "markets' are still not happy, it is said that this is because governments have not acted "quickly enough"! This "reasoning" is perfectly illustrated by Sergio Romano in 'Corriere della Sera' editorials today - here

But in reality, as everyone knows, "markets" do not act on "fundamentals" any longer, but rather on "speculation" - which means that for governments to be able to take "the correct decisions" they would first have to stop "the moving target" of market speculation! But in order to do that they would have "to suspend" the very source of "the correctness", the "meter", of their decision-making - that is to say, the "markets" themselves! Now you see how absurd this entire argument is. This is not to say that the corruption and nepotism in Italy and other countries should not be stopped. But it certainly will not be stopped by replacing one group of bandits with another (the markets) - even if we could agree that these "abuses" had much to do with the sickness of capitalist society. 

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