Capitalism and Socialism

Last week is the most dramatic of all the weeks in known history of our generation (who had missed the great depression) and has redefined many conventional thoughts about the capitalistic markets and free economy. The week started with the fall of Lehman’s and was epitomized by the Fed’s bail out of monstrous AIG to the tune of 85 Billion dollars.
Capitalistic economy as per Adam Smith’s is governed by the invisible hand and is to be governed by the participants and with basic governance by regulators. Those who are smart could make money irrespective of their background and those who are not would lose money however mighty they may be. The free-economy had been the pioneering face of the democratic countries and is the basis of the consumerism and global addiction towards luxurious life style.
When the going gets tough, tough gets going and when the world was tired of conventional financial instruments, there emerged a bunch of smart traders who devised complex terminologies to sell the toxic assets (Credit Default Options and Credit Default Swaps have become household items now) and there was nothing wrong in what they did till the market busted. As they say “Success is a great Liar” and makes to be unaware of the possible consequences in the longer run and adding to the human behavior of denial, nobody wanted to blow the whistle.
In fact, nobody blew the whistle and it got blown by itself and eventually the market got shaky and the rest is well documented. But the very interesting part in the whole story is the fact that definitions of capitalistic society are being redefined and earlier foundations are being forgotten. This said, what the definitions of a capitalistic society are?. In my view, there are 3 top things which are the building blocks of the capitalism. First, the market exists by its participants and by their competitiveness. Those who are highly competitive survive and less competitive ones get eliminated (Survival of the fittest). Market is open for newer and legitimate ways to make money.
A socialistic economy based on Karl Marx philosophy advocates protection of interests and encourages governments to tightly govern the industries and advices them to build or own huge non-competing industries leading to state sponsored monopoly. After all the effort that has been spent in curbing communistic policies the US govt has sponsored bailout of Bear Sterns, AIG etc and has created a kitty of 800 Billion dollars to act upon any failures.
Though my intentions are not to undermines the intentions of different countries efforts to safeguard interests of public (me being one of those), but I have a feeling that with the revised laws of the game, the distinction between capitalism and socialism ( I hate this ) are lost and its time where we rewrite laws and come up with something like capocialism which is a balanced approach between best of both. Till that happens lets all start our days praying that we would be able to keep our jobs and pay our mortgage bills, Do you differ?

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