@ozandy and Kipp:
As the author of this artice says, what we have seen in recent years in the US and th UK (and obviously also in Australia) is not a liberal development, even though it has been called just that by its opponents. The term "neoliberal" has been frequently used by opponents of free markets. But they constantly failed to explain what they actually mean by that, not to mention that "Neo-Liberals" traditionally are those in favour of a free market with a strong government regulating markets that are in danger of imbalances such as monopolies. Contrary to popular belief "Neo-Liberals" thus are by no means free market radicals but acknowledge the necessity of government regulation.
Liberalism has come under attack from a surprising coalition of the left wing (typically non-governmental) and conservatives (typically governmental).
You are right: The recent years have seen an unhappy if not appalling collusion between governments and big corporations. But that has little to do with "liberal" or "free markets" despite being labelled as such.
Interestingly enough, this was foreseen by one of the fathers of Neo-Liberalism, Friedrich August von Hayek, who explained the collusion between left- and right-wing big government against liberalism in his 1960 article "Why I am not a conservative" http://www.fahayek.org/index.php?option=com_content&task=view&id=46

Richard, you are right.

"Capitalism", "free trade" and "economic rationalism" are used in this forum to denote:
1. big government using self-granted monopoly powers to forcibly rip off the whole population and pay the proceeds to politicians and banks
2. government taking money out of people's bank accounts and paying it to government agencies who pay it to corrupt governments overseas
3. government incessantly inflating the money supply so as to get more money, when they do not have the courage to raise taxes honestly, which is always.
4. government military adventures that seem intended to kill large numbers of goatherds, shopkeepers and bridal parties.

The arguments against capitalism in this forum seem to fall into two basic categories:
a) personal abuse; the snivelling of morons
b) getting the definition of capitalism inside-out, upside-down, and back-to-front, to denote the anti-capitalist machinations of government economic interventions for socialist or mercantilist purposes.

Ironically, all the social and economic problems that the critics of capitalism are concerned about, are exactly the reasons in favour of liberty and against government. These people are actually confused supporters of capitalism, and prevented by their ignorance from understanding so.

Murry Rothbard once said, there's nothing wrong with people being ignorant about economics, because it is a specialised branch of knowledge, and is called 'the dismal science'. But there is something wrong with holding forth loud and long in vociferous opinion based on that economic ignorance.

And that applies to all the critics of capitalism that I have seen in here in the last month or so. None of them has refuted, or even understood, the arguments that they are purporting to refute.

Markets are very efficient devices for providing and processing information, for organising production and distribution of goods and services so as to allocate resources to their highest valued use and thus maximise community income. Their superiority to central planning is well attested.

There may be cases where markets do not produce the most efficient outcome. This may arise when there is a natural monopoly, where externalities are not taken into account, where there is information asymmetry or in the case of public goods.

Identification of such “market failure” is not sufficient reason for government intervention. Indeed, “government failure” is more common. The World Bank advised that “countless cases of unsuccessful intervention suggest the need for caution. To justify intervention it is not enough to know that the market is failing; it is also necessary to be confident that the government can do better.” A BIE assessment of the Commonwealth’s fifteen major interventionist policies from 1970-85 found none had clear benefits, 13 had negative returns.

Should the cost to the community of market failure be significant, government should first see whether it is possible to improve the workings of the market. If not, it must assess its capacity to produce a better outcome, and the costs and benefits of any intervention. Given that a number of studies have found administrative costs of around 15-50 per cent in government industry support programs, the prospect of a net benefit from intervention must be considered doubtful.

Within the Queensland system, the term market failure has rarely been used in its true economic sense. It tends to be shorthand for “We think that certain opportunities for which there is no commercial support should in fact be pursued, with government funding.” That is, picking winners.

In 1996 The Economist noted that: “Government intervention must overcome three formidable difficulties: the tendency of regulated firms to “capture” their regulators, weak incentives for efficiency within the public sector, and missing information (where markets lack it, governments are likely to lack it as well). … the burden of proof should lie with those who would extend the government’s role."

Dr Hartwich should be congratulated for putting his opinions forward in a clear, concise and readable manner. A couple of points I found arguable, however:
"The Millennium Bug, for example, seemed to be a huge threat to mankind, but in the end it did not do any real harm - apart from the billions of dollars that were pointlessly spent to prevent planes from falling out of the sky, lifts being stuck and power stations shutting themselves down."
Would the author also bemoan the billions of dollars 'wasted' on the eradication of Polio and Smallpox, when these diseases are also no longer a problem?
The other point I found questionable was already picked up by Till; it was not human inventiveness, or the (Government, taxpayer funded) space race which gave us such things as microwave ovens, personal computers, better cars, etc; or the military complex which gave us the (rudimentary beginnings) of the internet, but the good old 'drive for personal profits'.
I find that last one the most painful cut of all, when the internet is arguably the most egregious example of hobby hackers and enthusiasts contributing freely to create something far, far greater than the sum of its parts.
Of course I have to agree with the good Dr. about the role of the media; in the last example, the media must share some responsibility for the fact that Bill Gates should be so well known, when the man who literally gave the world a far more stable operating system freely, Linus Torvalds, rarely makes the papers.
Yes, as has often been stated, the free market system may not be perfect, but it is -so far- the best system we have.

Continued...
However:
The 2 greatest problems which, like the elephant in the corner, never seem to get a mention are clearly
1. the fractional banking system. When there is many times more money in the system than there is goods and services, how can we not lurch from one crisis, or boom and bust, to another?
2. Sheer size. We are slowly coming to realise the need for bio diversity; nature teaches us very clearly the need to not put all our eggs in one basket. When will we learn that the need for economic diversity is just as great, for exactly the same reason?
This crisis should have clearly demonstrated that 'the bigger they are, the harder they fall'.
The market's answer? "Not big enough. We need more mergers, takeovers and acquisitions".
Unbelievable.
Capitalism is a system whose success is due entirely to competition.
What happens when the race is won? When the winners are established and the losers have been exiled, destroyed or swallowed whole?
Fiat car company recently claimed it wasn't large enough to survive. It's spokesman claimed within a year or 2 there would be only 6 car companies.
How long until there is only one?
Will that still be Capitalism?

Ozandy “Liberals support large government too in reality”
This “Liberal” does not.

My observation of decades is the politics of large government, making it easier to ensure we can only aspire to the level prescribed by the state, are the socialists and

the liberals/conservatives support smaller government. I name Ronald Reagan for trying to reduce US governmental involvement, Margaret Thatcher doing the same in UK.

To the matter of banks lending money to people who could not repay it – the short reason given to explain the GFC (as Krudd would put it) what sort of banker would do that?

My understanding is socialist minded folk in USA decided it would be a good idea to make housing a political football and underwrite anyones ability to buy a house… good vote catching politics… this could be done by the government underwriting the mortgages so the banks took no risk.

That is not capitalism at work.

It is a manipulation of a system to produce a politically expedient socialist outcome.

It is the sort of manipulation which the Europeans like to play with their farm subsidies charging the public double the price and creating the wine lakes and butter mountains of the 1980’s then selling surpluses to Russia rather than let “market capitalism” determine the price..

Capitalism is being used as the whipping boy for the failures of big government; big government born from the dreams of socialists.

It is just another example of the lies of socialism