In today's Globe and Mail, Margaret Wente reviews Plutocrats by Chrystia Freeland.
I'm delighted with her (and the author's) distinction between being pro-market and being pro-business. Too many people somehow get the impression that economists are pro-business when in fact most economists are, if anything, pro-consumer and pro-market.
...[T]he super-elites are often the product of a strong market economy. But as their influence grows, they can become its opponents. They claim they’re pro-market, but what they really are is pro-business. They use their lobbying power to tilt the playing field, not to level it. As a result, serious tensions emerge between a pro-market agenda and a pro-business one.
You’d think the crash of 2008 would have taught Wall Street some humility. Instead, those tensions are as bad as ever. Last year, Mr. Dimon’s firm got into a mess with “whale trades” – a series of huge bets on derivatives that blew up. JPMorgan suffered large losses. But the scary part is that nobody in charge had a clue what was going on. A damning Senate investigation has concluded that bank officials ignored the warning signals and misled regulators and the public. In other words, nothing has changed. Wall Street is still unable to police itself, and the regulators are unable to police it, either.
There are no simple answers to these problems. The fundamental challenges of democratic capitalism won’t be resolved by a wealth tax or by redistributing more money from rich to poor... . As Ms. Freeland writes, the credibility of capitalism itself is at stake.