Capitalism and Free Market

I have not a deep insight on Subprime mortgage crisis in the USA but I know another similar situation taking place in my country. This one is worst. It eventually (presumably next year) will drive my nation to a full economic collapse. I do not discard severe consequences, like riots, spoliations, or even a civil war. Of course, USA is not in this situation by far. Nevertheless, to study similarities between both crisis may be interesting.

A simplified version of the story is that speculative real estate business has led us to an unaffordable international endowment, besides inflation and unemployment. My country is suppose to be capitalist. Now that unemployment and poverty is coming, people is complaining about Capitalism.

Did Capitalism drive my country to full collapse? Is Capitalism a dangerous and unstable economic model?

Here is a point of view: my country has never known what a genuine Capitalist economical model is. It has been working for years in an intervened market system. Not intervened by government but by spurious particular interests.

Capitalism implies Free Market. In a free market, competence emerges spontaneously. Competence warrants fair prices. Speculation cannot coexist with fair prices. So, in conclusion, an authentic Capitalism is incompatible with Speculative Markets.

In this sad place, building costs per flat are around 30,000 US$, but selling prices are 10 times more expensive. If here you dare to build flats at a fair price, then you are going very soon to meet the Grim Reaper. Free market is nonexistent in a country where law is just a symbolic concept and speculation is the rule of thumb.

To everybody that blames Capitalism of the national bankruptcy, just think a second about the responsibility of the government to preserve Free Market.