THIS IS not a time for capitalism to Icelebrate. The heady days of 1989 have given way to disenchantment with free markets in the Anglo-American world. The high tide of capitalism has touched the shores of the Nordic countries, bastions of social democracy, while the politi-cally correct stalk North America. Francis Fukuyama's celebrated essay, End of History, often articulates this as a triumphant moment in the ebb and flow of capitalism and no more. br>
Paradoxically, it is the dynamism of capitalism that tears asunder the illusions of its own potency. In the 1980s, the deregulation of airlines was cited as an example of how unhindered enterprise could yield dramatic gains for consumers. People's Express, a private airline, lowered passenger fares to a fraction of the then prevailing levels. Today, a new wave of mergers in the airline industry has raised unfamiliar questions about regulatory policy.

Beginning with American Airlines, some operators in the industry took advantage of data bases created by information technology to identify frequent fliers and offered them the bait of lower rates to reserve this lucrative source of revenue for themselves. Airport space is scarce and can be allocated only to a few airlines, who see an advantage in merging to share the loot. The grip of the remaining airlines can be broken if tradeable rights over airport space are created. It will then be possible for the more efficient to outbid the now laid-back incumbents. Alas, lawmakers need to confer for a while before they build the institutions appropriate for the new requirements at airports. br>
The book under review reflects a certain ambivalence. For a change, here is a book without a concluding chapter: The author is happy to write a noncommittal review of the issues.

The cure for capitalism's ills is Higher doses of capitalism.Environmentalists chafe at the greed for money, which destroys wildlife. Their good but misplaced intentions can be aptly illustrated by a campaign against the killing of elephants in Africa, which led to an excess population of the animals who tram-pled on humans. Rising prices of ivory helped to finance handsome bribes for officials. African governments were also perpetually short of funds to finance effective programmes to save elephants.

The capitalist cure Capitalism's calculating ways can help out. Let the hunters shoot a safe number of elephants, paying a price for it. The revenues generated can finance the governments' programmes for elephants. An adequate supply of ivory may keep its prices low enough to prevent corruption.

Activist governments have never succeeded in being an effective sub- stitute for the market. The 1930s crash created a need for protecting bank depositors and most countries adopted insurance schemes to com- pensate the victims of bank failures. This was done without realising that the fear of losses keeps a check on overly risky investments by banks.

In the new environment of financial deregulation in which the profits of banks are under pressure, it is not uncommon for banks to recklessly invest in high-risk ventures knowing that losses will be paid from deposit insurance. Many governments have had to take over the huge bills of bank failure, which have been the source of budget deficits.

Good doctors know how to let the body build its own defences against illness. In the aftermath of the debacle of socialism, governments will have to learn the subtle art of letting markets find cures for their own ills.

Kishore jethnandani is a freelance Journalist.