Pascal Salin

Back to Capitalism Publication date : February 25, 2010

It is generally accepted that the current economic crisis is the result of bankers' lack of ethics and greed. It is alleged that their desire for personal enrichment, in the form of huge bonuses, led them to take excessive risks, in order to increase the trade volume. They are accused of seeking personal wealth at the expense of the general welfare. It suffices to contrast the bankers' victims — the unemployed, families whose homes have been seized, economically devastated professions, and the taxpayers who paid the bill to bail out the banks — with the heartless bankers themselves, who allegedly made huge profits at the victims' expense.

To conclude, it has been said that since the banking profession is incapable of setting rules to govern its members' behaviour, it is up to the State to set limits and to fulfil its role as the watchdog of public morals. For the critics of capitalism, the crisis perfectly illustrates the notion that seeking personal profit does not favour social harmony and that it defies the common good. But is this really true? Did the crisis result from too much deregulation? It has certainly served the cause of those who want more regulation and more intervention — they are already enjoying an upsurge in popularity. But isn't this turnaround too simple? Such, in any case, is Pascal Salin's unorthodox thesis, which shows that the crisis can also be blamed on too many bad rules, on failed economic and monetary policies — and on not enough real capitalism.

• A surprising argument, an interpretation in sharp contrast with the somewhat facile consensus that has gained ground over the past months announcing the “return to Keynesian economics”.

• An independent mind examines the economic crisis and the hypocrisies that have sprung from the prevailing interpretation of events.

• Why were the various governments in such haste to take control of the global economy? Was it because they had already lost control, or because they exercised their control so badly? These are the questions that Salin studies here, as he re-examines the monetary policy, the credit policy and Government actions of the past few years. He poses several new questions: Is another Bretton-Woods really needed? Is it really necessary to establish a new equilibrium between China and the U.S.? Isn't international cooperation just an illusion?

Pascal Salin is a free-market economist in the classical liberal (even libertarian) tradition of Frédéric Bastiat, Ludwig von Mises and Friedrich Hayek. A professor at the University of Paris-IX-Dauphine, he is the author of Français, n'ayez pas peur du libéralisme (2007), Libéralisme (2000), La Vérité sur la monnaie (1995), La Concurrence (1995), Libre-échange et protectionniste (1991) and L'Arbitraire fiscal (1985).