A nifty essay by Luigi Zingales in the new journal National Affairs is headlined "Capitalism After the Crisis":
When the government is small and relatively weak, the way to make money is to start a successful private-sector business. But the larger the size and scope of government spending, the easier it is to make money by diverting public resources. Starting a business is difficult and involves a lot of risk — but getting a government favor or contract is easier, and a much safer bet. And so in nations with large and powerful governments, the state tends to find itself at the heart of the economic system, even if that system is relatively capitalist. This tends to confound politics and economics, both in practice and in public perceptions: The larger the share of capitalists who acquire their wealth thanks to their political connections, the greater the perception that capitalism is unfair and corrupt.
I have only a few quibbles. He's probably a little too kind to the trust-busters, which he calls "squarely pro-market." Also, he blames de-regulation for the consolidation of banks in this country, writing, "In 1980, there were 14,434 banks in the United States, about the same number as in 1934. By 1990, this number had dropped to 12,347; by 2000, to 8,315. In 2009, the number stands below 7,100." But the same sort of national consolidation has taken place in industries from bookselling to office supplies and department stores, not driven by de-regulation but by economies of scale and other factors that have made America into, in many industries, a national market rather than a collection of regional ones. He may also somewhat overstate the influence of the banking industry in Washington in comparison to, say, unionized autoworkers. But these are really quibbles with what is a fine essay.