I’ve been debating economics (particularly the bailout) with someone, and they said this:
"Nigeria has 100% pure capitalism. How well is that going for them? There don’t have strong institutions like church, a healthy financial system, integrity in the courts, traditional marriage.
Capitalism flourishes because of the strength of these institutions. Financial markets need confidence. If the entire market is frozen there is no weeding out a segment of bad actors. It’s going to weed out the entire financial institution. The first thing go will be jobs and they will vanish quickly. Then capitalism with a fundamental institution will then take on the traits of Nigerian type of capitalism.
Save the ‘entire’ financial institutions with as many as possible market based solutions. Allow the government to set up a fund be a player in the real estate market and let the American public get an equity share in that fund."
I’d modify this a bit to institutions like church, transparency in business dealings, respect for the rule of law, and family. The State is the avowed enemy of such institutions and works to erode the ethics that support them.
If he’s talking about the Sultanate of Dubai then he has a point, but that model is not possible in the US as presently constituted. Also, the quality of decisionmaking deteriorates the more ownership is dispersed and attenuated.
And to his observations regarding Nigeria, the bottom line is that Nigeria is Nigeria because it is run by Nigerians.