Originally posted by xmarksthespot
I haven't been following this thread for a bit, so I'm not sure if this has already been mentioned...But out of curiosity, how exactly would an anarchist society cope with the string of financial collapses that have recently occurred - which are themselves in some corners thought to be a result of fervent deregulation. Where would the hundreds of billions of dollars in liquidity come from to rescue these institutions; or would their failure - and the ensuing inevitable economic fallout - simply be allowed to occur?
I'd argue that the problem is not with fervent deregulation, but not enforced regulations.
Many of the practices that mortgage companies were using were already illegal. Not to mention that the pseudo federal Fanny May and Freddy Mac were also involved, allowing the companies to essentially borrow federal funds to make more money on illegal loaning practices.
Clearly we can draw a distinction between "non-governmental policy" and "failed governmental policy".
In many ways (big surprise) I see this as too much government. Companies have known for decades that they can socialize the economic losses of poor investment policy. The insurance companies and banks that have been bailed out, largely, made extremely high risk investments knowing the risk of those investments was no longer theirs to bare.
In a truly free market, the idea would be that incentives for that type of practice would be reduced, as companies would fail and go under. Possibly some mechanism to enforce some transparency in financial endeavors (government policy doesn't work in this regard either), but if a company knows they have to make good on their debts, and can't pass it off to some government agency, they will be forced to have better practices, or they will fail.
And no, I see no problem with letting major companies fail if they are unable to succeed.