Portal:Capitalism/Selected quote/51

“ No longer is modern man able to believe "that government governs best which governs least." In a frontier society, when a man moved farther west as soon as he could hear the bark of his neighbor's dog, there was some validity to the view "let every man paddle his own canoe." But today, in our vast interdependent society, the waters are too crowded to make unadulterated "rugged individualism" tolerable. The emphasis is increasingly on "we're all in the same boat," "don't rock the craft," "don't spit into the wind," and "don't disregard the traffic signals."

Perhaps nineteenth-century America came as close as any economy ever has to that state of laissez faire which Carlyle called "anarchy plus the constable." The result was a century of rapid material progress and an environment of individual freedom. Also there resulted periodic business crises, wasteful exhaustion of irreplaceable material resources, extremes of poverty and wealth, corruption of government by vested interest groups, and too often the supplanting of self-regulating competition in favor of all-consuming monopoly.

Gradually, and in the face of continuing opposition, the methods of Alexander Hamilton began to be applied toward the objectives of Thomas Jefferson: the constitutional powers of central and local government were interpreted broadly and were used to "secure the public interest" and to "police" the economic system. Utilities and railroads were brought under state regulation; after 1887, the Federal ICC (Interstate Commerce Commission) was set up to regulate rail traffic across state boundaries. The Sherman Antitrust Act and other laws were invoked after 1890 against monopolistic combinations in "restraint of trade." Regulation of banking became thoroughgoing; after 1913, the Federal reserve system was set up to serve as a central bank, aiding and controlling member commercial banks; and since 1933 most bank deposits have been insured by the Federal Deposit Insurance Corporation or in the case of Federal saving banks, by the Federal Savings and Loan Insurance Corporation.

” — Paul Samuelson (1915 – 2009)
Economics: The Original 1948 Edition