Capitalism is the “least worst” way of channeling our wordly efforts properly. As noted it is, like any human device, limited and flawed, but we must persevere.

To the specific issue of regulating free markets, we cannot trust the limited and flawed humans in government to micro-manage the affairs of the limited and flawed humans in business.

Rather, the right role of government is more modest – to enforce the premises of free markets: many independent agents, free flow of information, no subsidies, no monopolies, and, after repeated blunders, no “too big to fail.”

With AIG, from professional experience I state unambiguously that the government panicked last fall. AIG should have been handled in bankruptcy, where we have well-documented and long-established procedures and priorities to manage such events fairly, equitably, and without political games. Note that a bankruptcy would only impact the sophisticated players who dealt with the parent company. The millions of individual policyholders, insured by the myriad operating subsidiaries, were never in any danger of loss.

I was beginning to think there were no Eastern Orthodox Christians willing to defend the free market. I just finished listening to you being interviewed on “The Illumined Heart”. What a breath of fresh air!

Now that I’ve read your article, I have an even clearer idea of where you are coming from. I am intensely interested in the Austrian school of economics and the political philosophy of libertarianism. I will have to keep reading your blog to see if and where we differ.

Once again, it is so good to hear someone who shares my faith stand up for the free market!

As I agree with you that capitalism is the ultimate choice over any other economic system; however, it is a form has many flaws that are hard to avoid due to our general nature being greedy and selfish creatures. Furthermore, any man-made created system is flawed to a certain degree and we only learn of such flaws out of on-going experience and we need to correct them as we go along. Therefore, I do not think that the pure form of capitalism can work. Such fact is clearly reflected in the demise of the economic system in the capital of capitalism, the United States of America.

I believe what our economic system is going through its natural course of warning signs of its flaws; they have happened at our peak as the greatest economy of the world. During any system’s peak, many of the imperfections surface and a correction(s) are mandated to correct it and eliminate any possible catastrophes. It is obvious that the power running the economy is confined to very few institutions and individuals that drive every aspect of our daily life; such power must be controlled and regulated. Today, an eminent collapse to the system is threatening the very fabric of the society and such collapse is driven by the greed of those few entities that are running our nation with very minimal to no serious and thoughtful regulations. This threat can create a ‘domino effect’ that can lead us to wars and many other negative impacts that can and should be eliminated. In addition, such confinement of power without regulation is nothing more than pure dictatorship allocated to few individuals.

Regulating the system may seam an injection of some of the socialist idealism or any other system that may conflict with the capitalism protocol and ideology. Yet, I strongly believe that the power of our great nation is mainly based on the potpourri of ideas and theologies that came from every corner of the world with the different generations of immigrants. Injecting good ideologies derived from other systems and experiences can enhance capitalism and make it work to protect its integrity. In conclusion, a CAPITALISM-socio’ system may be a more practical and realistic system for us.

One thing caught my eye, however: “As an entrepreneur, you also face high risks but can hope for sizeable return”

I think the key word is “hope”. What level of risk is appropriate for companies and who decides what that level is? The reason we’re in the financial mess we’re in now is because of the willingness (and even eagerness) of numerous mammoth lending institutions to bank the futures of their businesses in poorly understood, high risk investments. The fundamental gamble, of course, was that the housing market would continue to rise indefinitely (a foolish speculation, even given my lack of financial savvy). From this came Ninja loans, subprime lending, securitizations and credit default swaps.

I think one of the principles of capitalism is that the losers of the gamble must fall. Businesses that can’t compete will go under. It’s a reasonable system, but unfortunately, most Americans and companies apparently lose those principles and ideals (some of them drastically so as evidenced by the rise in crime) when it comes to their jobs and livelihoods and whether they can put food on the table. Hence, the request by automakers, insurance companies and banks for bailout money.

I don’t really have an answer for this all. I’m hardly suggesting government control of all commercial enterprises. Yet, I can’t help but wonder if risk should not be legally limited to a certain relative level depending on the size of the company. Perhaps it’s a “necessary evil”, since capitalism will only work when those who live under it are willing to face all of its consequences when the system plays itself out.

As it stands, it seems we are not.