The post-financial crisis: More regulation

Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net

Since the seventeenth century, capitalism has never existed without government, on the contrary, each new capitalist stage has always been accompanied by more and better regulations. The role of public administration has always been fundamental to the development of capitalism, and in no place the fanciful idea of market self-regulation without government has been tested successfully. This is why none of the contemporary economic superpowers is supervised by a weak government.

So when we review the history of capitalism, we can easily grasp the importance of government in terms of actions that have resulted in indisputable improvements, as the implementation of fiscal and monetary policies; labor, contract and banking laws; as well as the rules on public safety funds and cash ratio -legal reserve-

We saw it also in 2008-2009, it is undeniable that the government's intervention reduced the impact of this crisis. For example, the public power was used to enhance the guarantee of savings, protect those affected by bankruptcy or fraud, limit short selling of companies that were on the brink of collapse, approve the financial rescue of banks and automakers, and implement an intense economic stimulus plan.

Hence, another process that will continue its activity on capitalism, after the 2008-2009 financial crisis, is regulation, as there are some things that, at least for now, the market's invisible hand does not do better than the visible hand of government.

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