As today’s the first anniversary of the Northern Rock nationalisation, I thought I’d re-read Matthew Parris’s stunning defence of free markets in this week’s magazine. I recommend CoffeeHousers read the whole thing, if they haven’t already, but here’s a key passage:
“So amid all the doom-mongering and recanting, I have an assertion to make. The market has not failed. The present collapse is evidence that the market is working. Confidence bubbles are an inherent feature of a free market system. Panics — confidence vacuums — are an inherent feature too. The test of the theory of market capitalism is whether the system provides from within itself the means to prick both.
It does. The first — a confidence bubble — has been pricked. We are now sucking ourselves the other way: into a confidence vacuum. In time this too will be pricked.
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