The nature of modern capitalism is very clearly revealed this morning, in this chart:
Most of Friday's stock exchange losses have been recovered this morning. And why? Because the markets believe that the coronavirus scare has now got to government, and that they will now bail out markets in the event of it developing further, meaning that it's time for stock exchanges to take private profit at public cost yet again.
I was preparing a talk on capitalism on Friday. In it I noted that capitalism is claimed to be a system for organising the economy that prioritises:
- The private ownership of the means of production;
- The market as a mechanism for allocating resources;
- The upholding of private property rights;
- A minimal role for the state consistent with the above.
Except, as I went on to note, that is not what modern capitalism is. Modern capitalism is a system for extracting value from others, and most especially the state, which it captures for this specific purpose.
We really should not be doing this again.