Is current global economic chaos a fatal blow to capitalism?
Hardly. Capitalism has survived greater chaos than the current panic, and will as long as human beings yearn for material advancement. What may be dealt a severe blow is the relatively unregulated use of private investors’ money. That will come, as in the aftermath of previous financial dislocations, from a combination of new public rules and the reluctance of wary fund managers and plain folks to trust certain types of financial institutions. The Panic of 1907 gave birth to the Federal Reserve System and the stock market crash of 1929 and the ensuing Great Depression gave rise to the Securities and Exchange Commission, federal deposit insurance, unemployment insurance, and restrictions on banking and investment activities. Political opinion divided as to whether President Franklin D. Roosevelt’s measures saved capitalism or started a drift toward socialism.
