There is no doubt that the only surviving socio-economic system prevailing is the free economy system which generated fast economic growth and prosperity albeit often ignoring social injustices along the way. This capitalistic system was born in Europe in the middle ages replacing feudalism when private concerns were generating surpluses and were ready to re-invest same thus spurring economic growth, albeit erratically.
In the 18th century a Scottish moral philosopher, Adam Smith became the pioneer of political economy and advocated for the “free market” and “the invisible hand” concepts while Ethics and Moral philosophy, a subject he taught at Edinburgh University were essential built-in ingredients in this new ideology.
In the first half of the 20th century, an English economist John M. Keynes advocated interventionist government policy. i.e., close monitoring (not controlling) of private business activities and the occasional use of fiscal and monetary measures to regulate the economic cycles for the benefit of all. Decades of prosperity along the Keynesian model characterized the economies of W. Europe and N. America after the 2nd world war.
The origins of today’s colossal worldwide financial crisis were born in Chicago University where an American Nobel Prize winner, Milton Friedman, originally a Keynesian in economic policies convictions started in the 60’s to preach ultra liberal theories, de-regulation, complete government hands-off and without any monitoring or intervention. He was undoubtedly inspired by the high risk American culture originated in the spirit of the conquest of the Wild West, by adventurous cow boys searching for gold within a legal vacuum.
In the 80’s a process set in motion by US President Ronald Reagan, British Prime Minister Margaret Thatcher and many other free-economy country leaders lead to a worldwide spread of this mode of LAISSEZ-FAIRE, that was advocated by the so-called Chicago boys who were omnipresent within the IMF, WORLD BANK and even later acted as consultants to a large number of ex-communist countries.
Major private financial institutions in the USA, Japan and Europe ended-up in the hands of such executives who were thus in no violation of any legislation but were in fact acting greedily and unethically, betraying the confidence of their customers. The border line between the laws and the Ethics were lost.
What has happened in USA in 2008 is a magnified repetition of what has happened in Japan 10 years ago when the...