FAILURE OF THE MARKET, STATE AND ECONOMICS FROM THE PERSPECTIVE OF THE FINANCIAL CRISIS

Abstract

The perennial conflict between the supporters of market solutions and interventionism is based on contrasting the market with regulation. The aim of this article is to analyze the opportunities and threats faced by alternative regulation mechanisms from the perspective of the crisis in the global economy, as well as to give an account of contemporary economics from this angle. The article is focused around three hypotheses. First, it is a mistake to put the market system and regulation in opposition to each other. Second, the underlying cause of the crisis is the violation of classical liberalism rules resulting both from politics and the methodology of contemporary economics. Third, critical analysis of the methodology and logic of the development of 20th century economic thought may point to a systematic error in the doctrines which have dominated mainstream economics.