Stock markets around the world have taken a hammering over the last few days. Hardest hit are the Chinese markets which are down some 20 percent since the start of the year. Australian indicies have not fared much better with $60 billion being wiped off in yesterday’s trade. Right now I dare not see how much of a beating my superannuation fund has received over the last few days.
In the midst of this market uncertainty, the one thing we can be certain about over the next few days will be the cries from the ‘capitialism and free-trade is bad’ crowd.
Like clockwork, we can expect to hear from neo-socialists, gushing fans of Thomas Piketty, and pretty much anyone who resents people and institutions having the right to make financial decisions and form relationships without interference or coercion from the State.
Combined with governments around the world laden with debt, things aren’t looking particularly rosy right now. But we need to get one thing clear – it isn’t free trade that has got us to this point, but rather governments living beyond their means with unsustainable entitlement programs, corporate welfare, and government interference and distortion in the marketplace.
Free trade, open markets, and individuals empowered to make their own decisions and to take responsibility for their actions is the solution to our current woes – not the cause of them.
