WASHINGTON, DC, September 8, 1998 --  

When acting Russian Prime Minister Viktor Chernomyrdin declared his intention to impose an economic dictatorship, I knew it wouldn't be a banner week for global capitalism. This was but the worst news in a string of bad news days. In Malaysia, President Mahathir Mohamad announced an end to the free trade of his country's currency. And in the United States, a collapse of stock prices vaporized a year's worth of capital gains in just a few days. After nearly 10 straight years of news buoying the cause of free markets around the world, current events are shaking the foundations of the world's future economy.

Doomsday commentators have jumped on the news with frantic comparisons to the 1929 stock market crash, ensuing global depression, and rise of fascist movements. While such comparisons are silly and pointless, the fact that they are heard from so many indicates just how frightening the news has been.

The conventional wisdom says the collapse of the Russian and East Asian economies happened because of bad bank loans and the pervasive corruption associated with "crony capitalism." According to this argument, the collapse was not caused by a failure of capitalism, but because the economies were not capitalist enough. While this may be true, the explanation sounds a bit too easy. It is distastefully similar to the defensive response of Marxists who claimed the Soviet Union fell not because of the failure of communism, but because it wasn't true communism.

While the Marxists who used to make these arguments were almost always wrong, their presence served a useful purpose. Once upon a time, these people would exploit as propaganda every blunder of the market system. Today we face a severe shortage of free-market detractors. The silence is almost eerie. While ideological opponents to capitalism exist in Russia's parliament and among academics throughout the world, their theories have been so discredited that few people pay them any attention.

The absence of these opponents has proven dangerously liberating for market advocates. Without the self-illuminating criticism of an ideological rival, it is too easy to become unaware of the flaws in your own reasoning. The absence of such criticism is partly responsible for the crisis that now faces the world economy.

In our endless search for heroes, we often end up idealizing those with critical shortcomings. With double-digit growth rates and pro-Western outlooks, Thailand, Malaysia, Indonesia and South Korea became poster children for international capitalism. But in our excitement to cheer the success of these nations, boosters of free markets glossed-over these countries' shaky democratic traditions and corrupt government influences. With the reality of these deficiencies now in the open, it is becoming clear how much we have inadvertently harmed both our credibility and our cause.

If world opinion turns against capitalism, it will be extremely easy for anti-market opportunists to point to the bruised credibility of the market's boosters when insisting that capitalism failed. How can people be asked to believe that the failed Asian economies weren't really capitalist when pro-market advocates cited their virtues for so many years?

The global economic crisis must serve as a wake up call for all market advocates. We cannot afford to play fast and loose with our market heroes. Supporters of liberty must be vigilant that capitalism and free markets not be given a bad name by petty autocrats who would distort the true meaning of the system. We cannot allow a cause that universally advances prosperity and individual liberty to be abducted by people who do not support its central tenets.

There is no question that capitalism has an extremely bright future. It has a grand record of success, and has achieved the dubious distinction of facing no credible opposition. The absence of an anti-market watchdog makes it all the more important that advocates engage in self-criticism. If the world economy continues to falter, or market boosters continue to uphold corrupt and doomed systems, the threat of an anti-market backlash could shift from a possibility to an extremely ugly reality.