The end of the 1980s brought about the demise of the Soviet Union and its then satellites. With the failure of socialist planning, gloating took place among some Western circles who declared absolute victory for free market capitalism. Almost twenty years later, as we approach the end of the first decade of the new millennium, we are in the midst of a US-led major crisis of the Western financial system. Very different quarters are gloating now, blaming it on the failure of capitalism, and suggesting that a return to a system with socialist overtones is not only preferable, but unavoidable. Many point out that even the essence of the bailout plan, put together by a free market administration in the US, already points in that direction.
A financial crisis can have vasts costs and consequences around the globe, particularly in the short-to-medium term. But such consequences, and the political rethoric around it, ought not cloud the need to engage in a reasonabale debate about appropriate ideological, systemic and policy responses, which will have wide ranging ramifications for the longer term. Moving from an unfettered free market ideological stance to a pragmatic and middle-of-the-road market-friendly role for the government may be warranted: one that balances the need for continuing private entrepreneurship and market-led innovation with the checks and balances of government oversight and pro-transparency regulations.
