Wing ah Hume,
Once again, you drag the debate back to a "Socialist under every bed" debate; despite the fact that no one is advocating socialism.

"The usual terminology of political language is stupid. What is 'left' and what is 'right'? Why should Hitler be 'right' and Stalin, his temporary friend, be 'left'? Who is 'reactionary' and who is 'progressive'? Reaction against an unwise policy is not to be condemned. And progress towards chaos is not to be commended. Nothing should find acceptance just because it is new, radical, and fashionable."
Mises.

Your dream of an unfettered market is simply economic anarchy ("chaos"). Governments did not 'give' banks the right to create credit out of thin air; this was something they invented for themselves (Google Lombard).
Governments have been trying -half heartedly, unsuccessfully- to control, or at least moderate the banks' excesses ever since.
What happens when you remove restrictions on banks? Interest rates (under Keating) went through the roof.

"Mises argued that money is demanded for its usefulness in purchasing other goods, rather than for its own sake and that any unsound credit expansion causes business cycles." Wikipedia.

So what is it that Bill Gates, Warren Buffet, et. al., want to purchase?
Tasmania?
Yes, unsound credit expansion does cause business cycles.
That's why the wilful creation of credit must be controlled (if not eliminated).

In my mind Grim is right. To me arguing by extremes at either end is like planning in absolutes WOT. Likewise taking ANY philosophy economic or other as holey writ is equally preposterously myopic and unhelpful.
As a matter of choice I think the term “wantonly irresponsible credit should be outlawed at all levels”.
To me caveat emptor is a cop out not a justification however it is a clear indication the morality of the people involved.

Wing I think you missed my context.
• Capitalism is a good TOOL. You wouldn’t let a hammer control/dictate the nature of society neither should capitalism. Likewise ideology is also a tool you can beat a person to death with it but that’s not what it’s for. Socialism be damned as an absolute it doesn’t work either on mass numbers.
• I’m simply calling for equity (fairness) in behaviour NOT Equality, as in all the same.
• Uncontrolled capitalism is a term on a sliding scale not an absolute.
• As has been discussed the derivatives market was as near to an unregulated market as you can get and look what happened.
• Again the biggest loses’ corporate crashes, frauds and disproportionate exec salaries have taken place under the neoliberal reign. Clearly it’s broken, we need a new paradigm.
• It’s the manipulative distortions I abhor should be regulated away.
• It’s the collateral damage I object to

Fatfingers-
Sorry, I hit OO’s quota yesterday, and they made me wait. :-) Continuing:

Regarding the evidence "that neoliberalism is superior", you apparently go for the usual special pleading, that the post-war success was due to something, anything, other than government management of economies. I think the burden is on the profession to demonstrate (rather than just assert) that factors like "WWII, technological and societal change, decolonisation, etc" can explain the success. And if you appeal to WWII, that's when economies were even more tightly managed, and that's when economies finally pulled out of the depression. For three decades neoliberals have taken as an unquestionable fact that unfettered markets are superior, but you have to perform complicated historical contortions even to begin to pretend there's any support for the claim. The evidence, on its face, goes exactly the other way, and very clearly.

Finally, I am a scientist of some international standing with four decades' experience studying a complicated system (the Earth). I do real science. The neoclassical stream of economics seems never to have understood that theories must be tested against observations of reality before you can claim to be doing science. It's not enough to do elegant mathematics. So that's why a geophysicist is writing articles (and books) about economics - to teach the profession how to make economics into a science. In its present form it's no better than the medieval ecclesiastics who debated how many angels could dance on the head of a pin.

I'm not the only one developing a more scientific approach. Eric Beinhocker, in The Origin of Wealth (Harvard Business School Press, 2006) summarises a large amount of work on what he calls "complexity economics".

Wing-
Underlying everything you say is still the presumption that unfettered markets are self-regulating and produce optimum results. That's precisely what I'm challenging, because it has no basis in theory, and the evidence is consistent with that conclusion.

Shameful Neo-Liberalism in Iraq

Comparative calm achieved through dollar deals between American Generals and Saddam's Sunni Shaiks

US military reputation thus ruined by the truthfulness of `The Surge'.

More ruination as Sunni Shaiks threaten to again sool out their insurgents if Baath Party is refused promised seats in new Iraqi Parliament.

Western media much to blame owing to deliberately holding back above knowledge to our public.

If this is the way to achieve peace in the Middle East, surely we must be losing?

Cheers, BB, WA.

So many points to answer, but I'll try.

The canard "unfettered markets" kept being brought up. If anyone can point to a truly unfettered market, I'll be happy to talk about it, but I don't know if any exist. We can only discuss relatively free and relatively unfree markets.

Citing Steven Keen is not a good sign - appeals to the fringe are not strong arguments. It's analogous to relying on climate change denialists and ignoring the majority.

I think you're wrong about markets not being self-correcting. They self-evidently have very strong feedback loops. The corrections may be disruptive or damaging, but they occur. In addition, misguided attempts to avoid or reduce these corrections typically just postpone and worsen them. The current financial crisis can certainly be classified as such - lax monetary policy at the beginning of the century (an attempt to cushion a correction) helped inflate the debt bubble that has burst with such bad effects in the last year.

Regarding economies of scale, here you demonstrate the perils of a little knowledge. Economies of scale are not the only determinants of company size. There are countervailing forces - diseconomies of scale, agency problems, diminishing marginal returns, some factors don't even scale, etc. So your argument is totally wrong-headed.

"that's when economies finally pulled out of the depression"

Another ignorant comment. Australia and England, by avoiding applying Keynesian policies, escaped the Great Depression much faster than the US! Furthermore, war economies did not bring prosperity. I suggest you go here and educate yourself: http://www.independent.org/pdf/tir/tir_01_4_higgs.pdf

I made the obvious point that the past 50 years of economic history can't be explained in one-dimensional terms. You claim it's "special pleading". That's simply laughable.

To be continued.

You are half-right in saying that economics is a pseudo-science. All social sciences are. That's because we're dealing with human beings and their interactions, for which there are no simple laws to discover, no universally applicable rules. Imagine an physicist attempting to discover patterns and make predictions about molecules that can remember their past and make guess about their future, that make guesses about other molecules. That adapt their behaviour to their environment, that seek to change their environment. That communicate and manipulate, that seek to control other molecules, that behave rationally most of the time but not always.

That's precisely why economists seek to isolate one variable at a time through "elegant mathematics" and simplified models - to introduce some scientific rigour into the process of studying a chaotic system. The results won't be exactly what happens in real life, but it will be a start, and any approximation will be much better than nothing.

Empirically, social science usually does not have the luxury of randomised double-blind trials. It has to make do with case studies, statistical analyses, and the like. These have shown, conclusively, time and time again, that relatively free markets bring greater prosperity and better social outcomes than relatively unfree markets. The body of evidence showing this is positively gargantuan - I'm astonished that you haven't bothered to access this diverse and comprehensive collection before pronouncing yourself the scientific saviour of economics. That you have a demonstrably patchy and inferior grasp of the basic historical facts, not to mention an abysmal understanding of economic theory, only serves to highlight your arrogance in this respect.