of free markets

The Mint has published a serious of article by different people about The Year I find less interesting to read those articles except Ramesh Ramanation’s “of free markets versus financial markets”. But I believe that if Sauvik would have written a piece on The Year could be loveable with his immense skill to interpret the events in such a way. But still there is room to bite:

• “Free markets are about entrepreneurs, people who start off invariably as small business owners who hire from the ground up, maybe two, three or 10 people, and then grow from there. Most often, these entrepreneurs will never get to use the sophisticated tools of the financial markets, other than the typical loan from the neighbourhood bank. But that’s all they need, because they aren’t looking for more than their own appetite for risk, creativity and hard work to help them move up in life, and for government to get out of the way, set fair and transparent rules of functioning, enforce them correctly, reduce red tape and provide the necessary social infrastructure. The true engines of an economy are these entrepreneurs—big and small, but mostly small. Financial markets are about one aspect of facilitating this—and not the end-all of a free market system. They play a role, a critical role, but they are not the centre of the universe. In fact, 2008 showed that an overemphasis on financial markets, an over-monetization of economic activity can have devastating consequences. 
  
• As we stumble into 2009, wallowing in our incoherence, doubts are beginning to emerge: Was it so bad to have a socialist mixed economy model, where the government was a benevolent dispenser of licences and all else? Is the market-based economy all that it’s made out to be? Could it really be possible that the communists—God forbid!—actually had it right, that we need to keep markets on a tight leash; that slow and steady is a much better path than see-saw uncertainty; that the Hindu rate of growth isn’t a bad thing after all?”