Drawing the wrong conclusions about the economic meltdown.

On Naomi Klein’s schizophrenic indictment of economist Milton Friedman, The Shock Doctrine: The Rise of Disaster Capitalism, it is argued that in times of great social and economic upheaval, sinister free market advocates push their ideas of limited government and minimal state interference in the economy upon the vulnerable and the unsuspecting. The major points upon which this argument rests are dubious and have forced her critics to ignore a more remedial point: Why is it considered sinister that, upon the spectacular failure of Marxism-Leninism, for example, it would be suggested that it was time to give classical liberalism a try?

So it’s equally unsurprising that we are now seeing Naomi Klein’s thesis in reverse– the rise, amongst many in the pundit class, of “disaster socialism.” As markets tumble and the world economy convulses, market-unfriendly ideologues are rushing in, seizing an opportunity to argue that they were right after all; to argue in favor of a rollback of “extreme” capitalism; and to suggest further government regulation and control of the economy. The gravediggers are leaning on their shovels, waiting for capitalism to expire, despite conflicting diagnoses on a patient very much alive.

Here, as an example of the recent dying-capitalism meme, is a front-page story from The Washington Post, under an ominous headline presaging the “end of capitalism.” The story begins with a bold, if entirely unverifiable, claim: “The worst financial crisis since the Great Depression is claiming another casualty: American-style capitalism.” It’s anyone’s guess what exactly this means, or just what qualifies as particularly American capitalism, as the effects of the crisis ricochet around the globe, and no data is offered. A Reuters columnist was equally categorical, proclaiming “Capitalism as we used to know it is on its deathbed” celebrating the turgid “scientific socialism” of Karl Marx, “whose thinking on banks seems oddly contemporary these days.” Noted novelist and screenwriter Hanif Kureishi sees a fulfillment of Marxian prophesy. “Marx always said that capitalism would rise and then collapse, and this would be a continual process, it was built on that, and this is what’s happened. And what can you do but laugh?”

CAPITALISM, GLOBALIZATION AND THE FREE MARKET AREN’T GOING ANYWHERE.

Or take this bit of wisdom from Washington Post columnist Harold Meyerson, gleefully sounding the death knell for “unregulated capitalism.” Two weeks previous, Meyerson bemoaned the “ideology of unregulated capitalism– of Reaganism” and predicted that the current economic crisis “may ensure that the GOP itself becomes one more casualty in the collapse of laissez faire.” Both columns are laced with a series of little idiocies that, if true, would surely spell doom for the American economy.

As most economists sort through the rubble, most pundits are trying to seize upon a narrative that, evidence be damned, will help advance a particular economic cause. When the 1987 stock market crash failed to provoke a depression, and when capitalism not only refused to die but appeared to have suffered little lasting damage, it was, liberal economics expert Paul A. Samuelson said, because Reaganomics wasn’t “pure capitalism”: “The 1929 panic was no greater than the 1987 panic. Black October 1929 was followed by a great depression because we lived under pure capitalism in those days. Laissez-faire economics allowed 8,000 banks to fail.” Not so with the regulatin’ Reagan. John Heimann, vice chairman of Merrill Lynch Capital Markets, told an audience the same year that, “It may well be that historians, looking back at the ’80s, will pronounce it an era in which a peak of government economic intervention was reached… ”

A week after the 1987 crash, future American Prospect co-founder Kuttner wrote, “The stock market has signaled a warning: If they continue the economics of fiscal fantasy and extreme laissez faire, depression will follow market crash as surely as it did last time.” Twenty years ago economist Ravi Batra’s paranoid treatise Surviving the Great Depression of 1990 ranked fifth on The New York Times bestseller list.

The point here is simple: Trust no one who declares an end to a system as complex and successful as capitalism, or who sees the current crisis as the long-awaited fulfillment of Marx’s voodoo economics. Now that globalization has brought unprecedented wealth to developing countries, and has lifted millions out of poverty, it’s time, say the “disaster socialists,” to try it our way.

But capitalism, globalization and the free market aren’t going anywhere. Yes, U.S. unemployment is still only 6 percent– it will most certainly rise– and the stock market isn’t quite in full collapse, but is suffering from periodic seizures. And indeed, we are most certainly heading toward a severe recession. But capitalism is durable, and has sustained itself in far worse situations. So ignore the disaster socialists: They are, after all, only taking advantage of the current crisis to try a little shock therapy of their own. And who could blame them?

MICHAEL C. MOYNIHAN is a fellow at Timbro, a free-market think tank in Sweden.