Capitulating Capitalism?

'American economy has fallen off a cliff'', Warren Buffet said recently. The rest of the world economies seem to perched precariously on the edge. It is a result of corporate greed and recklessness displayed by capitalism's poster boys such as Lehman Brothers and Bear Stearns, which have since gone out of existence. Other such 'demonic' institutions, now utterly reviled by people, are being nationalised in a hurry or are being bailed out by governments around the world.
Capitalism seems to be going bust, just the way communism did a couple of decades ago. The reds are having a field day, with I-told-you-so smiles on their faces.
Back home in India, everyone from the economists to ministers to armchair analysts are singing hosannas to India's public sector units (PSUs), saying how their conservatism saved the country from a similar disaster. Their share prices are getting better valuations in the stock market while those of private players in the same industry, such as banking, manufacturing, etc. are being dumped by retail and institutional investors.
Do the PSUs really deserve the credit they are getting for saving us from the evils of capitalism?
I don't think so.
The PSUs are--when examined in an otherwise favourable environment--behemothic examples of inefficiency, sloth, lack of innovation and even sheer incompetence. They are clear examples of what an enterprise should not look like.
The PSU banks did not lend recklessly not because they were averse to greed, but just out of their sheer bureaucratic red-tape and don't-care attitude to growth or bottomlines. The fact that this saved them from huge loan default risks is just coincidental. That they did not take risks was not by design but by their lack of motivation.
Risk is what keeps the world going. If everyone avoided risk, there were would be no businesses, no goods and services sold and hence no economy. Of course, the risk is taken with the motive of profit, which is the raison-d'-etre of capitalism.
How much risk should be taken is a function of the environment in which you operate. That is why people keep buying shares when the prices have reached stratospheric levels (since they see the prices going up everyday), instead of selling, and sometimes lose their shirts.
But to say that the person who does not take any risk, does not invest, does not innovate (all out of the fear of going wrong) and hence saves his money, is wise is just plain stupid.
The one who risked his money in investments or an enterprise is the one who needs to be given a hand when he falls because of a false step.
So, while the world is engulfed in negativism about capitalism, that is the only way out if we are to become more efficient, competent, innovative and--ultimately--wealthy.