Europe's dark secret ...They might not like to admit it, but Europeans don't mind a bit of capitalism ... When history comes to write the tale of the euro-zone crisis, the chief villains, if Europe's leaders have any say, will be not dissembling Greeks or dithering Germans, but the financial markets. Traders subjected Greece to "psychological terror", declared George Papandreou, its prime minister. ... Nowhere is contempt for free enterprise, and its linked evils of wealth and profits, more intense than in France. Nicolas Sarkozy has declared laissez-faire capitalism "finished". Almost alone in Europe, France imposes a yearly "fortune" tax on most biggish assets. In literature and philosophy, from Molière and Balzac to Sartre, the French have denounced the corrupting power of money, and ridiculed the grasping nouveau riche. Today's bosses, always cigar-chomping, are subject to satire, scorn and even "boss-napping". Communists, Trotskyites and the New Anti-Capitalist Party are treated not as curiosities, but serious talk-show guests. – Economist

Dominant Social Theme: Let us spring to defense of free-markets.

Free-Market Analysis: The Economist magazine is once more mounting a defense of capitalism in its dry and witty way. This is a venerable old magazine that was founded in the mid-1800s in part to track the rise of railroads in Britain and the money they were making. Railroads have long departed as viable profit-making schemes (victims of the auto and ensuing government nationalizations), but the idea remains somehow that the West is still operating under "capitalism." Not only that, but the Economist wants us to know that the proper term is "laissez-faire capitalism."

Of course from our point of view the Economist is one of the mouthpieces for the British elite. As dashing and amusing as Punch magazine, as erudite as another mainstream mouthpiece, the Financial Times, the Economist profiles the goings-on of the world every week. For young people just starting to read it, the magazine offers a potpourri of delights. There are its clever profiles of little-known countries and its dry send-ups of the silly doings of powerful people. What a world! The Economist tells us. What are we to do but read and smile along with its talented, anonymous writers and its foolishness?

Well, how about a little "truth in labeling?" The West, in our view, is laboring under nothing nearly like laissez-faire capitalism. The Western model of economics currently is central-banking corporatism. Or to put it another way, power-elite mercantilism. A handful of impossibly wealthy Western families, led by the biggest banking family of all, has patiently seeded central banking in all parts of the world until the cancer has fully metastasized and there is no place beyond its reach.

Central banking is price-fixing pure and simple. And when you have got the price of money wrong, everything that flows from it is wrong as well. But nonetheless, this is the profile of the world today. One can argue as Ellen Brown does, for instance, that there is a difference between state-run central banks and private public central banks such as those operated by the US and perhaps Britain. But in practice we don't see it, or not at the level that the benefits are manifest.

Is there really such a difference between the Chinese central bank and the American central bank? Is the Chinese miracle really due to the state's control over that bank, or has the same thing happened to China under a central banking regime that has happened to the US and Europe – a destructive boom that will inevitably be followed by a bust. We see all the foreboding signs in China that we have seen elsewhere: an out-of-control real estate boom, myriad skyscrapers in numerous cities that languish unoccupied, a full city in Mongolia that lies fallow and unpopulated, etc.

And still the party continues. Hedge funds flock to China. Commentators tell us that the concern is overblown. Others patiently explain that it is "different this time" and that the Chinese will escape the fate of other fiat-money economies because the Chinese wealth is new wealth, because the Chinese are honorable and hard-workers, because the Chinese save while the West spends. Well, we shall see.

In Europe, the bust is already here. The one-size-fits-all currency does not after all fit everywhere and in every manner. In fact the EU and its euro experiment stand revealed as what people already knew it was, an export-scheme for the Germans and a way for the French elite to continually exercise the delightfully deranged notion that little France is able to swing far above its playing weight simply because the French are, well ... French. It is French perspicuity and French good-taste that gives France this peculiar ability. Except it does not. The euro is unraveling and we shall see if the French are able to sustain the Great Game in the face of the realities of the REAL market.

In the US, there is little pretense anymore that anything like a free-market exists. What was once a legitimate free-market society, admittedly with a statist core, especially after the advent of the Federal Reserve in 1913, has degenerated into a kind of "me, too" European socialism. Social Security, the Great Society programs and now Barack Obama's socializing of one-sixth of the American economy, are effectively transforming the US. There are "markets" in the US, but only the biggest players can afford to leverage them.

All over the West, the economic parameters are similar. Central banks print money to swell economies that then collapse and are jolted back to life via reflation like cardiac patients. This creates high inflation rates that rob the collapsing middle class of the paltry savings they have been able to amass. High taxes tend to strip more wealth from the middle class while regulatory excesses make it difficult for entrepreneurialism to take root or hold sway over the long term. Statist justice and, in America, a military industrialist complex and a prison-industrial complex make things even worse, adding an overlay of Big Government control to a Big Economy deflation and stagflation.

In truth, at this point, the West has nothing like free-markets. Money is created and controlled by mercantilist state processes. All forms of wealth are taxed aggressively and even mercilessly; entrepreneurial activity is regulated in such extreme detail as to exceed even the imagination of the most expert Swiftian satirists: The EU's recent mandate forbidding the sale of eggs in a twelve-pack must stand as one preeminent example.

What the West has is corporatism. There is a kind of free-market that exists, but one must belong to a large interest group to use it. If one is skilled enough with numbers or willing to become a lawyer, then one may join a large corporation and derive the benefits of such. Alternatively one may become a teacher and seek shelter in Teachers' Unions. One may become a military person or a police officer or fire officer or health-care worker and find protection in public unionism. One may work directly for the government. In all such cases, one is subordinate to a larger entity within the predetermined parameters, organized by a political priesthood at the beck and call of a power elite that stands invisibly behind these ever-vaster compilations of state-control.

Still, it is fashionable to maintain, as the Economist does, that the West is in a fervor of full-blooded capitalism of the laissez-faire variety. How on earth the Economist and its writers can maintain this fiction is beyond us. But they wish to, and so they do. It is part of the Hegelian dialectic, we suppose. If one part of the elite machinery claims that what we have got is capitalism-in-the-raw, then another mainstream element can continually claim that such naked and merciless enterprises need to be ameliorated by the rationalizing hand of government. Lord knows where it ends, though, as the cognitive dissonance grows continually more extreme.

Conclusion: One visualizes the USSR, eventually, and the Economist magazine, as dry and witty as ever, droning on about the competitive difficulties of aligning five-year plans and observing cheerfully that the West's Leviathan will have to grow bigger still in the name of democracy and fairness and to ensure that free-markets do not get out of hand. Eventually it all implodes. And the Economist magazine ("newspaper" as they like to call it) will lose whatever credibility it still retains. Pity it can't happen sooner.

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