Capitalism is on trial in the aftermath of the great financial meltdown, but we’re a long way from a verdict. Witnesses whose focus is the United States tend to blame market behaviour, especially on Wall Street, for the worst economic upheaval since the Great Depression; some but not all praise Barack Obama’s fiscal stimulus programme as a catalyst for what might be the beginning of a real recovery. By contrast, most observers of the continuing crisis in the Eurozone point the finger of blame at excesses of government borrowing, spending and market interference. Some but not all argue that bankruptcies of over-borrowed euro nations should be allowed to happen, whatever the short-term social cost, in the expectation that something better will arise from the ruins, and in preference to successive bail-outs backed by newly printed money.
And there you have, in a nutshell, what Nicholas Wapshott’s blurb writer calls ‘history’s greatest economic duel’. On one side, you have big-government macro solutions that involve heavy borrowing and spending in order to smooth out the troughs of the economic cycle; on the other, free markets as the clearest