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The Next Slum? The Atlantic. Coming to a suburb near you.
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Capitalism’s Mysterious Triumph Paul Krugman (hat tip Mark Thoma). This is a must read. Contrary to current opinion, communist countries were highly productive, for a while. Whether or not you agree with his conclusions, the information he presents is intriguing.
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Re: “The Next Slum?” A fair response to a point raised in another post regarding the various plans to bail out homeowners/mortgagers etc., that being: Is that way of life sustainable, per se?
What struck me in reading the article is: Who’d loan money to purchase what are, according to the article, houses that will start to disintegrate before the mortgage is paid off?
I must be confusing “use value” with “price”…
If high energy prices didn’t seem likely to be a permanent feature, it would be easy to dismiss this “death of suburbia” as overdone. 30-40 years ago, central cities were supposed to be history, but central districts with a good economic base are doing well.
But exurban sprawl and recently constructed McMansions and their wannabe cousins look vulnerable.
Re: Capitalism’s Mysterious Truimph… I’m an American Marxist, not a Russophile, so I admit I have no clue what really happened there, or is going on now. Sure, I’ve heard or read some part of all the stories, but everybody writing or telling has had a dog in the fight and so I trust none of them enough to believe any of them in total. As I follow current events in that part of the world, I usually find evidence for concluding that the failed Bolshevik project, and Stalinism, had more to do with what I don’t understand about a deference to authority than it had to with Marxist theory. In the particular case of defeating fascist Germany, I’d think that anyone confronting strangers speaking a different language who mean to conquer one would do whatever one could to prevent that (a version of the prospect of hanging…)
As an anecdote, I can relate that in 90’s, a lot of guitar players wanted “Soviet” made tubes for their rigs, on the claim that the Soviets had invested a good deal of research and production into vacuum tube technology to survive the EMP of nuclear weapons…
Anecdotes mean nothing, or everything. What has meaning is Krugman’s claim that:
“You may dislike capitalism, even feel that as a system it will eventually fail, yet do your job well because your family needs the money you earn. Capitalism can run, even flourish, in a society of selfish cynics.”
I can relate. That is what working for wages is about. That should also, I would hope, prompt people to ask themselves whether they really want to live with a bunch of selfish cynics.
Re Krugman:
Yes, this is a good question but Krugman answers it incompletely.
1) Second world war: The Germans would have won it early without the US resupplying Stalin in the crucial period of 41/42. True enough, mass production of tanks turned the corner on the german eastern front but only because the Germans lost air superiority in Russia (due to the plane and pilot losses in the Blitz).
2) I did not ask them back then, but triangulating their jokes, the Russians – who are not that stupid – lost believe in communism long ago, not in the late 80ties. So this is a real Krugman (Very smart man doing uncommon analysis coming to a hilarious conclusion)
3) The most important reason goes unnamed: You do not need a pricing mechanism for mass producing T 34. But you need one for a complex economy.
Capitalism vs communism is often seen in a superficial contest of who owns what. The normal worker did not own the means of production in any country of the world (before ERISA) whereas the normal CEO of a big company in both systems is chosen for political savy, only more so in communism.
It is the pricing mechanism, or better the absence of it, what doomed the East.
If the US best known economic commentator does not understand that, I guess we are doomed too.