Calm down, dear


It's only a recession.

I like Michael Winner, and I like his t-shirt in this picture. I also like Simon Jenkins and this excellent article in Friday's Guardian. Both, in their rather different ways, are making fundamentally the same point: economies have boom years and bust years, things go up and things go down, but in the end life goes on. Or in Jenkins' words, " the present crisis will pass and the current punditry will be seen as a silly and damaging exercise in talking down confidence".

Quite right, too. We are constantly being told that the current economic problems are akin to the Great Depression, or that credit crunch was as significant a blow to capitalism as the fall of the Soviet Empire was to communism. But these things are simply not true. Unemployment isn't going to reach 25 percent. People aren't going to starve. The stock market is going to recover. And capitalism itself isn't going anywhere.

Whatever happens, people will continue to make things, sell things, and buy things. People will continue to innovate, and others will continue to invest. Free exchange will go on. And that, ultimately, is what capitalism is. It isn't a system or a structure like the planned Soviet economies. It is a collection of free individuals pursuing their interests, and that's what makes it so dynamic and resilient. It might take time, but markets adjust, and ordinary service is resumed.

Now where can I get one of those t-shirts?