Corporate Crimes and Punishments
Capitalism will not take root around the world if corruption defiles it. Socialism collapsed a decade ago because it became discredited in the eyes of the peoples who lived under it. Now capitalism is receiving severe rebukes, with its critics given powerful evidence that they are right in seeing it as a system that works for insiders and their cronies. After all, isn't Enron's bankruptcy a crystal-clear example of inmates controlling their guards? If America wants to lead capitalism's global march, it must exorcize a growing culture of corporate crony capitalism.
The choice, of course, is no longer between socialism and capitalism. Socialism became a mess as great expectations of a workers' paradise were bogged down in bureaucracy. Without incentives and radical decentralization, economic progress is simply a dream. So the past century demonstrated time and again, which is why China - nostalgic egalitarian rhetoric notwithstanding - opted for all-out capitalism under its post-Mao rulers.
Did Deng Xiao Peng foresee the vast inequalities that would result? Possibly. But Deng wanted higher standards of living for every Chinese, even if inequality resulted. To function and remain socially acceptable, however, capitalism must be as clean as possible. Everybody may not get a chance to become rich in a capitalist system, but the system should not be perceived as rigged in ways that allow only insiders to get rich while everyone else pays the bill.
We hope you're enjoying Project Syndicate.
To continue reading, subscribe now.
Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.
Already have an account or want to create one? Log in