alloytoo
Honorary Master
Everyone.
Though communism ultimately appeared to benefit the elite decision makers.
Historically free market economies easily out perform demand economies, the cold war was won because America could afford to outspend the Soviet Union.
There is however no such thing as a completely free market, free markets operate within legal and fiscal frameworks which restrain them.
In the long term the free market is efficient with supply and demand reaching equilibrium, in the short term however it can be grossly inefficent resulting in boom or bust cycles.
A recession is not, as many would sugguest, an indication of something wrong with free market system, it is a natural consequence thereof.
The question is now whether or not governments & central bankers should intervene in the free market, and what shape that intervention should be.
It's my opinion that reducing the peaks and troughs of short boom and bust cycles will lead to less waste, and will ultimately result in better long term growth.
It's not in my opinion sensible to try to eliminate the troughs altogether because that would place you in a direct confrontation with market forces, a confrontation which you will ultimately painfully loose.
I personally favour passive intervention through legal frameworks over active intervention.
Reduce the appetite for risk through measures like higher fractional reserves and legal lending criteria and you reduce both the return and the risk.