A New Age of Capitalism

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) The first and highest form of the state and of the government and of the law is that in which there prevails most widely the ancient saying, that "Friends have all things in common."

-- Plato, Laws

Again, how immeasurably greater is the pleasure, when a man feels a thing to be his own . . .

-- Aristotle, Politics

From the time of the ancient Greeks, philosophers, politicians and just plain folk have debated the best form of society and the proper role of the state in the lives of its people. For more than a century, advocates of collective ownership and strong government control of the economy have marched under the banner of socialism. Those who champion private property, individual initiative and the pursuit of profit are in the capitalist camp.

A decade ago, socialism seemed to be on the ascendancy, despite some severe cracks in its facade. In Bombay and Bangkok, in Lima and Lusaka, governments were nationalizing industries and imposing ever growing and restrictive regulations on private companies. The rising tide of socialism threatened to become a tidal wave. Among superpowers, the Communist Soviet Union appeared to be gaining in international prestige and influence, while the capitalist U.S. seemed to be declining. Racked by oil crises, recession and an inflationary fever that soared to double digits, the free-enterprise system faced a doubtful, some said downright perilous, future.

All that has dramatically changed in the 1980s, as capitalism has become the spirit of the age. More and more countries are turning to free enterprise as the last, best hope for faster economic and social development. Fetters are being taken off industry. Entrepreneurship, the business of starting up companies, is in vogue. "If capitalism means allowing markets to work, then we are seeing some dramatic examples around the world," says David Henderson, chief economist for the Organization for Economic Cooperation and Development.

In the Third World, even socialist countries like India have increasingly turned to private enterprise in the search for more production and jobs. In Latin America, debt-plagued Argentina, which owes $51 billion to foreign creditors, is striving to dismantle some of the stifling legacy of state enterprise created by former Dictator Juan Peron. Communist nations are making efforts too. In Eastern Europe, small but thriving outposts of free enterprise continue to exist amid the suffocating state presence. Half the wurst and baked goods in East Berlin come from the private sector.

"The new philosophy can be seen very clearly across the spectrum of industrial nations," said Alan Greenspan, a New York City economic consultant, at a meeting last week of TIME's three Boards of Economists (see following story). In its latest economic outlook, the OECD noted that the state's share of the economy in 19 West European countries has begun falling for the first time since World War II. Public outlays accounted for 50.6% of gross domestic product in 1984, vs. 51.1% the year before. Even Scandinavia, where the welfare state achieved its fullest flowering, has caught the spirit. Says Nils Lundgren, chief economist of PK Banken, Sweden's largest bank: "Deregulation, market solutions and free enterprise are the order of the day."