As I read all of the bickering about Greece’s fiscal crisis (Paul Krugman’s latest salvo is here) it puts me in a mind to summarize. Japan has taught us that government spending does not ipso facto produce a flourishing economy. Greece has taught us that austerity does not ipso facto produce a flourishing economy. What does? We don’t know.
That’s completely consistent with what one of my economics professors said fifty years ago to the effect that we know how to produce shortages but we don’t know how to produce prosperity.
IMO those who draw a dichotomy between socialism on the one hand and laissez-faire free market capitalism on the other are missing the boat. Anybody who’s advocating one or the other is either misinformed or an idiot. Our problem is not in choosing between the extremes of a centrally-planned economy and a completely laissez-faire one but in providing prudent stewardship. Should this aspect be more or less controlled? What are our needs? What are the risks?
There will always be people who think they can make a buck out of unrestricted capitalism or as a commissar. Resist them.