Markets vs Government in Development Economics

Bill Easterly links to a recent article by Joe Stiglitz that expresses some concern that the recent financial crisis will lead to developing economies abandoning markets and moving to state-led planning instead.  Easterly is, I think, a bit optimistic in his reading of Stiglitz -- who I think is making an argument for extensively regulated markets, and not free markets, though it is welcomed that he does not advocate socialist planning for developing nations.  And as Easterly points out, that is the "big" debate once again at this critical point in time.

Comments

[Paul Kroenke]

Wow. Stiglitz writes that article like a monk who has lost his faith in God after seeing his brother struck down, and is searching desperately for some way to reconcile what he has always known with the events that have just taken place. Is it always so common for people in the economics profession to forget to take a step back from recessions and look at them from a long-term perspective as being a necessary (if painful) correction to the practices that caused an initial overabundance?

[Vichy]

Kroenke said, "Is it always so common for people in the economics profession to forget to take a step back from recessions and look at them from a long-term perspective as being a necessary (if painful) correction to the practices that caused an initial overabundance?"

After any sort of general crisis, don't people always look for someone and something to blame? Why would economists be any different?