Wednesday, October 2, 2013

Why Wall Street Is Not the Heart of American Capitalism

When someone wants to blame capitalism on some economic crisis, they often point to the example of Wall Street, which many consider to be "the heart of American capitalism." What if that was a lie?

Doug French, writer for bookseller Laissez-Faire Books, has this article which exposes the truth about Wall Street, the 2008 meltdown and why anti-capitalists get it wrong.

Says French:

The other night, I tuned into The Flaw, a 2011 documentary about the 2008 financial crash.
While telling the crash story, the movie flashes in and out of a street tour offered by an ex-mortgage bond trader. The young man has the required effervescence to keep a dozen tourists entertained while they look at nothing more interesting than office buildings. He cleverly lets members of his tour touch a toxic asset. Well, a page of the legal document of a collateralized debt obligation (CDO), anyway.
The camera pans to tourists taking pictures next to Charging Bull, the 7,100-pound bronze sculpture closely associated with Wall Street. The guide starts his tour saying what has become a worn out cliché. “Welcome to Wall Street; this is the heart of American capitalism.”
But is Wall Street really the heart of capitalism?
If we understand capitalism as a social system of individual rights, a political system of laissez faire, and a legal system of objective laws, all applied to the economy with the result being a free market, is Wall Street really capitalist?
Read the rest here.

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