Is the “trust” bank empty?
December 16, 2008 | industry, personal finance | Comments (0)Very interesting piece in Slate today about how capitalism, particularly American capitalism, operates on trust. With recent events, especially the exposure of the Madoff hedge fund fraud and the nearly $50 billion lost, can American capitalism survive?
Madoff’s pyramid scheme, far broader than anything MMM dreamed up, was made possible by our own tradition of lawfulness. And now he will help bring that tradition down. Here’s a prediction: In the coming years, American capitalism will become slower, more cautious, less productive, and less entrepreneurial. We’re still a long way from Eastern Europe of the 1990s or from the Latin America or Russia of the present. But maybe not as far as we think.
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