Foes of free-market capitalism have used the latest economic slump to trumpet their arguments favoring increased government intervention.
But Forbes Media CEO Steve Forbes isn?t buying it. He?s co-written the new book How Capitalism Will Save Us: Why Free People and Free Markets Are the Best Answer in Today?s Economy.
Forbes explains why governments usually cause more problems than they solve:
When a crisis hits, most people are taught that the correct response is to ?do something? to ?fix? the problem. That impulse is ingrained in our collective psyche as a ?can-do? nation. When something bad happens, we?re supposed to come to the rescue with all the expertise at our disposal, doing what we know how to do best. For politicians, ?doing what they do best? means making laws and spending lots of money. ?
Government?s role in the economy is not to ?do nothing?; it?s to help free markets work. Government does indeed have a critical role in democratic capitalism. Open markets cannot function successfully where there is no government to protect people?s rights and assure the rule of law. Government?s role in a democratic capitalist economy is to create hospitable conditions that give people the freedom to meet one another?s needs. It should enable them to develop their talents and to innovate, with the least possible interference and protection from harassment. Government must create an environment of certainty and predictability, such as assuring stable money and instituting a progrowth tax system.
Forbes appears this weekend on the next edition of Carolina Journal Radio. For a snippet of that conversation, click the play button below.
