When i first read Economics as a subject in 1982, i was fascinated by many things. The classical views of Adam Smith, welfare orientation of Alfred Marshall, rational choice based views of Robbins - it's really been an intellectual feast since then. Even today i am able to recollect some chapters and topics of my first text book on Economics. The definitions we read at that time - capitalism, socialism and mixed economy are more or less still fresh in the memory. But these words have suddenly begun to seem meaningless today.
The great recession of 2008-09 (i am sure many Economists will have a very interesting and intellectual satisfying time discussing the relevance and appropriateness of the adjective 'great' here!) has definitely shaken the trust of many advocates of free economy. They have lost all faith in 'the invisible hand'. Protectionism has come back. Even the strongest ones are coming up with direct or indirect protectionist policies. Democrats are behaving like republicans. Private sector enterprises are demanding (and, in many cases, having them too!) bail out packages unashamedly. The broken walls between different states have been re-erected overnight. And, of course, this is all being done to protect Capitalism!
Is it time to coin the term 'neo-capitalism'? One possible definition would be "Neo-capitalism is the economic policy that provides for socialistic measures taken up by recession hit economies in the name of providing required push to the automatic structural adjustment needed to recover".
May the soul of Adam Smith rest in peace.
