Reliance on Free Market Rating Options

[sixfive]

"As a result of the current global financial crisis, the international financial system can no longer rely primarily on the free market. To avoid future financial crises, governments and multilateral agencies will have to assume greater regulatory control over international flows of capital." Do you agree or disagree with this statement?

[sixfive]

I do not believe that more governmental control is a good thing. As mentioned in an earlier response by Quentin Green, "There isn't reason to err on the side of optimism when history and cyclic trends point to the likelihood of another global financial crisis. Just as there is a cycle of the four seasons, there will be cycles of boom and bust. " I think people have a tendency to react rashly to current crises and want quick fixes instead of having faith in a market correcting itself. These rash reactions, in my opinion, can lead to some unwise decisions and ultimately give a short term fix at the cost of long term growth and development.

As far as international regulation goes, I don't think a set of rules could be agreed upon world-wide. Cultural differences and backgrounds bring people up differently in their respective countries, and because of this everyone has a slightly different way of thinking. Some feel more governmental regulation is a good thing and feel it their obligation to serve their country, while some feel that they'll be equally if not more prosperous if given the opportunity to excel and not be held back by their government.

I believe that the market is self correcting given the opportunity to do so and not restricted or hindered by outside forces. This isn't to say that the government should stay completely out, as I believe a little bit of regulation is a good thing, but I believe the market is too big for the government to run efficiently and effectively. There's a lot of criticism of the work ethic of governmental employees, that they're lazy, do what they need to get by, and haven't got much incentive to go above and beyond what they're required to do. This is opposite of the private sector, which I believe should play the largest part in the free market.