Putting the "ism" back into capitalism: The need for reform and education.

from THE JAKARTA POST -- WEDNESDAY, MAY 27, 2009 -- PAGE 17 In a thoughtful op-ed article in the Financial Times "Uncertainty bedevils the best system", Edmund Phelps, 2006 Nobel Laureate in Economics, emphasizes the point that while capitalism faces the second greatest crisis of its history, reality is that "unfortunately there is still no wide understanding among the public of the benefits that can be fairly credited to capitalism and why these benefits have costs. This intellectual failure has left capitalism vulnerable to opponents and to ignorance within the system." The two great crises of capitalism, in the 1930s and today, share a number of features, including the fact that both reflect grave crises of knowledge, education and, consequently, confidence. In the 1930s, capitalism was abandoned by many countries in favor of the alternatives of state command of the economies, provided in both the fascist and communist ideologies. The big difference today is that both these ideologies have been probably permanently discredited; hence there is no …