With respect, Cardinal, you are speaking nonsense

Cardinal Cormac Murphy O'Connor recently made a speech in which he claimed that as communism ended in 1989, so capitalism has been killed off by the credit crunch.

We may concede the first statement that communism in eastern Europe seems to have ended in 1989, although ex-President Putin seems to want to reverse the process. But there still remain states like Cuba and North Korea, and there are other countries like Venezuela which have hopes of something in this direction. Whether these are socialist or communist may interest adherents of these ideologies, although the state trappings and dictatorships seem remarkably similar.

It is his second judgement which raises eyebrows. Again we could concede that a version of capitalism may have come to an end, as the result of deficiencies of government in various countries and a failure to carry out the proper monitoring and regulation.

To dismiss capitalism out of hand is a terrifying prospect. What is to replace it? Government control and administration of all economic matters? We have seen the gross inefficiencies which result. We have seen the failures all too often, and with them the political and social tyrannies.

If the best we can offer leads to centralisation, to suppression, to liquidation of dissidents, to rigid control of knowledge and behaviour and to the endemic inefficiency, then may the Cardinal's God help us!

Or did he mean that unfettered capitalism and uncontrolled markets must be no more? This is to misread the recent past. Markets have been suppressed, controlled and used by politicians to reflect their own ideologies, rather than the free exchange of information and distribution of goods and services in accordance with consumer needs and wishes. Freedom has been savagely curtailed. Does the good Cardinal wish us to go further down this road, to have individual privately owned firms being threatened with punitive action if they do not do the wish of the government of the day? This is what we have seen, - regulatory tyranny trying to replace the 'benign' effect of Adam Smith's invisible hand.

It should be remembered that sub-prime mortgages were the result of US presidents driving lenders to lend to "no hope" borrowers, or persuading them to lend too much, and a credit crunch from lax controls on private debt accumulation and too much public debt accumulation, and all this with traditional controls removed or diluted.

The credit crunch was not a failure of markets, and capitalism has been permitted great excesses because governments took their eye off the ball.

If honesty and integrity are restored or produced by better and not more regulation, if openness is demanded, if competitive forces are allowed, and if governments can keep their hands off, then capitalism can continue to do the work which it alone can do, - use resources efficiently, harness human ingenuity, drive and vision, to increase the wealth of all nations with all that this implies for health, education and human improvement.

I am sorry to cross swords with an eminent Christian leader, but I am afraid that on this topic he is as ignorant as I am on the finer points of Catholic theology. If I were required to speak about the latter, I would make sure that I spoke to experts first. I would recommend that he does the same on topics in which he is not expert.