Socialism or capitalism? Is Ayn Rand relavent today?

Free market according to Ayn Rand would cleanse the society of its ills. She said the market would punish unethical players and make their businesses unprofitable due to lack of public support. She said a stage would come when it would no longer be profitable to be unethical. Her advocacy was: free markets for better welfare. What happend in contemporary America is just the opposite.

The market players played foul as a cartel and allowed no fair options to the customers. What would the market do if there are no fair options left? When Hurricane Katrina wreacked havoc in the South East of N.America, the people who lost their homes hoped they can fall back on the insurance policies whose premuims they religiously paid. But to their consternation the companies refused to pay up. Thousands of people were payed half or less than half of their claims. In collusion with the damage assesment engineers who fabricated reports to bring down the payments, the Home Insurance players as a whole bullied the people into accepting meager payments for the damages. There were a rash of complaints, litigations filed against almost all the leading players during this time. How else would you explain the increase in cash flows for the Insurance companies after a naural Calamity? With no rules and safe guards to follow and no authority to overlook their operations, they had a gala time marketing fancy insurance policies to the victims who never understood the underlying terms of the contracts. At the time of settlement they defaulted under the cover of these contracts. Who will help these victims who feel cheated at the time of adversity? Where will the people go when their every thing is lost? How has the free market helped them? Would it be the case had there been clear regulations and a monitoring body?

Another example is the financial industry where the banks operated unfrettered and sold whatever junk they thought they could pass along. They erased life long savings of some senoir citizens and made them paupers at the time when they cannot work and earn. The so called rating agencies in collusion with the bankers gave investment grade ratings to toxic instruments which helped the banks to market them more aggresively. This encompassed a wider network of people and became a epidemic of sorts.

The problem here is, who will shoulder the blame? Private players cannot be blamed since thier motto is profit and they would do what ever it takes for achieving the same. People cannot be blamed for recklessness or ignorance since not all would be conversant with the guiles employed by the banks and they are as vulnerable as a herd of goats cornered by a sowse of lions. Unless there is a market regulator who balances the need of the consumer with the greed of the provider, there tends to be an imbalance. That is what happened here. There were no regulatory bodies to monitor the marketing of these financially toxic instruments, there were no proper rules laid out to specify how and what can be marketed. And the end result is there for all to see.

The whole situation shrieks for more regulation and resposive action from the governing authorities to overlook the market and create a fair playing field for all the parties involved.
I agree to some extent that regulation kills innovation. But does it have to be the communist way? Imagine a situation where the government prods the industry into following regulations. Imagine where there are no hard written rules but the government guides the players into being fair? I am talking of one government player in each sector competing with the private players. The government backed player would follow best of the practises and set an example for others, others can innovate and try to do better but operate only within the boundries of fair play. If one of them chooses to cross over and be unethical, the government backed player can cry foul and act as a safeguard. This enforces a code of conduct but doesn' t reek of regulatory bodies and communism. It could also earn the state revenues if this sponsored body makes profits. This prodcedure is now being followed in India with much success. Eg, LIC competes with AIG and others in insurance sector, SBI competes with ICICI and HDFC bank in the financial sector, SAIL comepetes with Tata Steel and Ispat in steel sector, Gail/OnGC compet with Reliance ans Shell. The examples are plenty. As a result, the market has become more vibrant and safe. May be its time for American to take lessons from the Indian regulators!

I can safely say, Any Rand, the nitty capitalist out thought you! So free markets can no longer be trusted....