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About 40 years ago, one of Maggie Thatchers chief advisors remarked that he wouldnt be satisfied when the Conservative Party was in government: he would only be happy when there were two conservative parties vying for office.

He got his wish of course. The UK Labour Party of the 1950s that espoused socialism gave way to Tony Blairs New Labour, and the same shift occurred worldwide, as justified disillusionment about socialism as it was actually practicedas opposed to the fantasies about socialism dreamed up by 19th century revolutionariesset in. Parties to the left of the political centrethe Democrats in the USA, Labour in the UK, even the Socialist Party that currently governs Francefollowed essentially the same economic theories and policies as their conservative rivals. Differences in economic policy, which were once sharp Left-anti-market/Right-pro-market divides, became shades of grey on the pro-market side.

Both sides of politics accepted the empirical fact that market systems worked better than state-run systems. The differences came down to assertions over who was better at conducting a pro-market economic agenda, plus disputes over the extent of the governments role in the cases where a market failure could be identified.

So how do we interpret the success of Syriza in the Greek elections on Sunday, when this avowedly anti-austerity, left-wing party toppled the left-Neoliberal Pasok and right-Neoliberal New Democracy parties that, between them, had ruled Greece for the previous 4 decades? Is it a return to the pro-market/anti-market divides of the 1950s?

Noor rather, it doesnt have to be. It can instead be a realisation that, though an actual market economy is indeed superior to an actual centrally planned one, the model of the market that both sides of politics accepted was wrong.

That modelknown as Neoliberalism in political circles, and Neoclassical Economics in the economic ones in which I moveexalts capitalism for a range of characteristics it doesnt actually have, while ignoring characteristics that it does have which are the real sources of both capitalisms vitality and its problems.

Capitalisms paramount virtues, as espoused by the Neoliberal model of capitalism, are stability and efficiency. But ironically, the real virtue of capitalism is its creative instabilityand that necessarily involves waste rather than efficiency. This creative instability is the real reason it defeated socialism, while simultaneously one of the key reasons socialism failed was because of its emphasis upon stability and efficiency.

I could get theoretical hereand I will in future columnsbut a personal experience is rather more telling. About 40 years ago, a then-girlfriends brother wanted to buy a 650cc motorbike, but he couldnt afford the roughly $3000 it took to buy a Yamaha or a Kawasaki (let alone what a Harley or a BMW would have cost then in Australia). But he discovered that he could buy a 650cc Russian motorbikethe evocatively named Cossackfor a mere $650. So he ordered one. And I helped him unpack it.

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