Competition, Coordination and Diversity

Competition, Coordination and Diversity

From the Firm to Economic Integration

New Thinking in Political Economy series

Pascal Salin

Competition, or the freedom to enter into a market, contributes greatly to the differentiation of human activities and therefore to economic progress. This fascinating book highlights the similarities between human systems at both the micro and macro level, and demonstrates how competition can positively affect the economic workings of firms and countries.

Chapter 13: From the financial crisis to the debt crises

Pascal Salin

Subjects: economics and finance, austrian economics


The financial crisis that began in 2007–2008 has generally been considered as an illustration of the fact that capitalism is fundamentally unstable, which implies that only state interventionism could make it possible to get out of the crisis and to avoid new crises. Moreover, many people have quite often expressed the view that this crisis was a symptom of the immoral nature of capitalism, since greedy bankers have taken too many risks in order to maximize their profits. Although these ideas are widely held, they are radically wrong and one ought to draw a completely different lesson from the recent crisis. In fact, the crisis is a consequence of state interventionism and governments ought to be considered as the only guilty ones. As a consequence, it is obvious that it is not justified to impose more regulations on financial markets.

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