Moody’s downgraded China’s debt saying there is a contagion risk.
Since communism is a command economy, the transition to capitalism was not too hard. Just a step away, and that is troublesome for capitalists.
Capitalists know that consolidation of industry and markets (to resist the declining rate of profit, without a distribution to support demand but, instead, increasing supply by consolidating demand) sets up the big switch. Weber’s verstehen becomes the capitalists’ biggest bug.
The paradigm (the TI) can shift. The Descriptive Random Utility (DRU) can become now, by design, but described as “it just happens!” Managing risk in a TBTF dimension, things can just happen that are known to be probable–expected–but unintended, nevertheless.
(Yes. I Know. Expecting the unintended consequence–the imperative value aggressively resisted–is not the best and the brightest TI of objective reality.)
The method to the madness is the descriptive model of a random utility. China expects inflation and unemployment, but its intelligencia knows that standing in line, and goods standing unsold on the shelf at no-bid prices describe the same thing.
TBTF bankers are saying that the contagion risk is not a problem specific to the banks, but “the system” (verstehen). They are describing an organized, bureaucratic system tending to an outcome they do not intend but know is entirely probable.
Switching to a more egalitarian purpose (bureaucratically described as the statement of “mission”) can very easily go wrong in command mode. It is much more practical to ensure a free-market ecosystem (economia) in priority. The system then controls for the probable risk (without sacrificing self-determination) of the unintended consequences described as having a random utility or what Ayn Rand called the “natural identity” of “objective reality.”
We have socialism now.
If you want socialism for the rich, vote for everybody else. If you want democratic socialism, vote for Sanders!