Corporatism ≠ Capitalism

I’m always fascinated by critiques of capitalism that rely on untrue assumptions. From a Boing Boing review of John Lanchester’s Whoops!: Why Everyone Owes Everyone and No One Can Pay earlier this week:

Lanchester explains the econopocalypse thus: a climate (the fall of the Soviet Union and the triumphal do-no-wrong belief in unfettered capitalism that ensued), a problem (using derivatives to expand risk, rather than limit it, which led to reckless lending in the housing market), a mistake (bankers assuming that they had laid off the risk using complex derivatives) and a failure (regulators refusing to look the financial gift-horse in the mouth). This provides an excellent framework for explaining the ways in which history, greed, and hubris conspired to create the worst financial crisis in memory.

There may be a “triumphal do-no-wrong belief in unfettered capitalism,” but the presence of regulators proves that what we have is neither unfettered nor capitalism. Since, according to the review of his book, Mr. Lanchester concludes that the economy will remain sluggish due to regulatory capture, the current climate is corporatism.

I’m not sure if the mistaken word choice originates with Mr. Lanchester or the book’s reviewer, Cory Doctorow. Regardless, those of us who support capitalism (as a synonym for a free market) do not support corporatism.