The Economic Crisis – Between Capitalism and Intervention
Abstract
The deepening of current economic crisis arises more frequently questions about the limits of free market and its failure to provide solutions for recovery. Market and capitalism based on it are more often blamed, but it seems to overlook the fact that even the name of this crisis, the sovereign debt crisis, sent in another direction. The guilty must be sought elsewhere. Not the free market, but excessive intervention on the market, made by state authorities, led to the current economic decay. More curious is that the solutions are expected to come from the same authorities. Banks that have taken excessive risk, encouraged by the “too big to fail” principle expect help from the state. States, overwhelmed by debts, expect financial rescue from other states. In this context, the association between economic crisis and the free market is a tendentious one, the measures expected from the authorities perpetuating the intervention and limiting the role of the free market.

Keywords
Business cycle, crisis, capitalism, free market, intervention
UNCERTAINTY, FREE MARKET AND INTERVENTION
The market process must be understood and analyzed as a coherent system of actions and reactions. All market participants act for satisfying needs, also reacting to the market signals. From this perspective, the economy is nothing but a complex network of information, of which good decoding depends any business success or failure. Merchants, bankers, real estate developers or farmers do not have a perfect knowledge of the market, but operates in an environment based on uncertainty. Precisely because of this uncertainty, the entrepreneurial function of prediction is a prerequisite of any business success in the market.

That uncertainty is a permanent feature of individual actions, has long been known. Since 1730, Richard Cantillon [1] claimed that all actions of entrepreneurs take place in conditions of uncertainty. However, we are obstinate to seek certainty, to hang to more or less fanciful forecasts. And this seems to be today, more than ever, obviously. Just as mankind was caught so many times on prophecies concerning the end of the world (in spite of the holy books references about the proliferation of false prophets), the prophecies concerning the end of capitalism make in the last period more and more victims.

Very popular in the last days was the interview given by Nouriel Roubini to The Wall Street Journal publication, where, as a true “prophet” of this crisis, he sympathized with Marx and said that Capitalism will destroy itself from inside and markets dont work [2]. We cannot help but asking ourselves what Capitalism and what Market is talking about Mr. Roubini. This is because the current economic system is far from being

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Limits Of Free Market And Economic Crisis. (July 7, 2021). Retrieved from https://www.freeessays.education/limits-of-free-market-and-economic-crisis-essay/